(Bloomberg) -- The largest shareholder in Methanex Corp. plans to nominate four directors to the company’s board on the grounds that new leadership is needed to oversee the development of a new methanol plant in Louisiana.
M&G Investment Management Ltd., which owns a 16.5 percent stake in Vancouver-based Methanex, has raised concerns with management about the risks of building the plant without a partner, M&G said a letter to shareholders on Monday.
M&G plans to nominate the directors at the company’s shareholder meeting in April because it doesn’t believe Methanex takes seriously its concerns that building the plant alone could stress its balance sheet and make it harder pay dividends and repurchase shares, M&G said.
"We are concerned that there is not sufficient oversight from the independent directors within the board room to maintain financial discipline in what is a relatively indebted company in a cyclical business," M&G said.
A representative for Methanex didn’t return a call for comment left outside of normal business hours.
"As part of our active and ongoing communication with all shareholders, Methanex’s board and management appreciate constructive input from shareholders and take all shareholder views seriously," Methanex said in a statement on March 18, after receiving a letter from M&G indicating that it is preparing to nominate board members.
M&G’s nominees include: Paul Dobson, acting chief executive officer of Hydro One Ltd.; Lawrence Cunningham, a law professor at George Washington University; Patrice Merrin, the former CEO of Luscar Ltd. and Kevin Rodgers, a former global head of foreign exchange trading at Deutsche Bank AG, according to letter.
Methanex produces and supplies methanol throughout North America, Europe and South America, according to its website.
(Updates with details of M&G’s letter to shareholders starting in first paragraph.)
To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net
To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Matthew Monks
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