Fairstar Heavy Transport turns down Dockwise “poison pill”Company News // May 16, 2012
Fairstar Heavy Transport says it has informed Dockwise that the unsolicited proposal its has received from the company "is of no interest to Fairstar."
"Dockwise has attempted to characterize the offer of US$30 million in “subordinated debt” to be an attempt by Dockwise to be helpful," said Fairstar. "However, a close reading of the Dockwise proposal revealed it to be another opportunistic device to try and lock in a NOK 9.3 ceiling for Fairstar shares."
"Fairstar does not consider “poison pills” of any sort to be appropriate tools in the proper management of our stakeholders’ interests," the company said.
"Fairstar had a facility in place with DNB Bank that would have provided not only the funding required to take delivery of Forte as well as make a progress payment for the Finesse.
"It provided the company with a performance bond facility that is required under the various contracts Fairstar has signed for Gorgon, Ichthys, Golden Eagle and CMMP Iraq.
"The DNB facility had a change in control clause giving DNB the right to withdraw the facility if any one party breached a 30 per cent threshold. A beach occurred on April 22, 2012 when Dockwise and its concert party announced their acquisition of over 50 per cent of Fairstar’s outstanding shares. The DNB facility is no longer available to Fairstar.
"Fairstar has conscientiously explored other options since April 22. We have an obligation to pay our partners in China for their work on Forte and Finesse," said the company. "They will be paid. We have an obligation to our partners in Gorgon, Ichthys, Golden Eagle and CMMP Iraq to issue performance bonds equivalent to 10 per cent of the contracts’ value. These performance bonds will be issued.
"Fairstar is currently negotiating with a new bank group to finalize a facility that will provide the liquidity we need to pay for our ships. It will also allow us to issue the performance bonds we have promised to provide.
"Most importantly, the facility will not disadvantage one group of our shareholders for the benefit of another. We are committed to fair play and prudent, transparent financial management. Details of our ongoing discussions will be released once the facility has been signed.
"Fairstar remains concerned that Dockwise continues to release false and misleading information. The financial reporting of our company has been properly audited and punctually released. Our auditors were present at the AGM to answer all of the questions asked by the Dockwise representatives.
"The AGM minutes will reveal that the Dockwise representatives had failed to read the accounts accurately. The suggestion made by Dockwise in their OSE release on 15/5 of “insufficient disclosure” is not true.
"Fairstar has consistently invited Dockwise to engage in a constructive dialog concerning the fair valuation of our company. We have produced clear evidence that the combination of the two companies is accretive up to NOK 14. We have expressed appropriate concerns for the future of our team, the interests and expectations of our clients and the rights of our shareholders who will not accept the low ball offer of NOK 9.3," Fairstar said.
"Dockwise has engaged in a hostile and dishonest campaign against Fairstar. They have told our employees that no changes will be made “for the foreseeable future”, they have told the market “ the interests of minority shareholders who will remain in Fairstar will be properlty taken into account."
"This type of ambiguous language is the specialty of clever lawyers. The words are hollow and their true intentions are perfectly clear. Fairstar will respond in detail to the Dockwise Offer tendered... once we have examined it carefully and properly. In the meantime we will continue to manage Fairstar with the same competence, skill and determination our Stakeholders have always expected of us," Fairstar's statement concluded.