Tag: ratification

NH’s Shareholders Will Analyse Removal Of HNA’s Directors

26 May 2016 – Expansión

Oceanwood Capital, the fund that owns a 10% stake in the NH Hotel Group, has submitted a letter to the hotel company requesting that it adds some new items to the agenda for the General Shareholders’ Meeting, to be held on 21 June. It is requesting the removal of the four directors appointed by HNA, the Chinese company that owns a 29.5% stake in NH, i.e. the group’s majority shareholder.

Oceanwood believes that there is a clear conflict of interest that prevents those directors from defending the rights of all of the shareholders, rather than just those of the investment group that they represent. At the same time, Oceanwood has proposed the appointment of four external directors, because they cannot be classified as independent given that they have not been proposed by the appointments committee.

The document, which was submitted by due legal process yesterday, the last day on which it was legally admissible, requests the removal from the Board of the current Co-Chairman of the company, Charles Mobus, as well as of Ling Zhang, Xianyi Mu and Haibo Bai. The justification for these removals lies in the conflict of interst that now exists due to the structural and permanent competition between NH and its shareholder HNA, after the latter reached an agreement with Carlson Rezidor, a hotel group that competes directly with NH in Germany, the Netherlands and Benelux – particularly in Berlin, Brussels and Amsterdam – . Oceanwood asks not only that the General Shareholders’ Meeting removes these directors, but also that HNA is prevented from exercising its right to proportional representation as a result of its shareholding, until the aforementioned conflict of interest is eliminated.

In its request for the removal of the directors, Oceanwood emphasises, amongst other things, that the Chairman advised HNA on its purchase of Carlson Rezidor and that during that process, the possibility was proposed of the Chinese group submitting a takeover bid for 100% of NH. Moreover, it indicates that the three Chinese directors rarely attend board meetings in person, and instead choose to channel their votes through Mobus.

Support

In parallel to these removals, the fund, which hopes to have the support of other institutional investors to reach the 40% threshold, proposes the appointment of four new directors: Paul Johnson, Fernando Lacadena, María Grecna and José María Cantero de Montes-Jovellar. All are reputable professionals in their respective areas of activity. Johnson has worked in the hotel sector for 30 years, where he has created a chain, Kew Green Hotels, which has more than 5,000 beds and was recently sold to HK CTS for GBP 400 million.

Lacadena currently serves as the CEO of Testa – which has now been integrated into the Socimi Merlin – and, for several years before that, was the Finance Director at Sacyr. Meanwhile, Grecna has been the CEO of Värde Partners Europe and, between 2011 and 2013, was the CEO of the company in Iberia, headquartered in Madrid.

Finally, Cantero is a marketing specialist, who used to work at Amena (Orange) and who has worked for Mutua Madrileña for the last eight years, where he has served as the Deputy CEO. Oceanwood currently has one director on NH’s Board, Alfredo Fernandez Agras, and it asks that the General Shareholders’ Meeting ratifies his appointment. It says that there is no need to re-elect him, as it wants to prevent HNA from requesting the revocation of his appointment on the day of the General Shareholders’ Meeting.

Original story: Expansión (by S. Arancibia)

Translation: Carmel Drake

NH Appoints 2 New Directors Despite Protests From HNA

22 June 2015 – Cinco Días

On Friday, the fund Oceanwood, which controls 7.58% of NH’s share capital, managed to take a seat on the hotel chain’s Board of Directors, despite HNA’s efforts to the contrary. HNA had tried to avoid the appointment of any new directors, by requesting the inclusion of an additional item on the agenda of the shareholders’ meeting, to limit the number of Board members to 11, even through the company’s bylaws provide for a maximum of 20.

The Chinese group HNA, which holds a 29.5% stake in the hotel chain, justified its proposal as being “in the interests of greater legal certainty”, even though the investment funds (other NH shareholders) had requested a seat on the board. HNA’s position meant that the funds’ entry depended on one of the existing seats being vacated.

Although the item (the vote regarding a reduction in the size of the Board) is still on the agenda of NH’s shareholders’ meeting, which will be held on 29 June, the management body decided to appoint two new directors on Friday, in support of their goal to strengthen “their commitment to transparency and good governance”. And so, Alfredo Fernández Agras was appointed as a proprietary director, at Oceanwood’s request, and Koro Usarranga Unsain was appointed as an independent director. These appointments must now be ratified by the shareholders.

Thus, NH has 13 members on its Board of Directors once more; the number had decreased to 11, after Intesa San Paolo’s exit from the hotel chain’s share capital. The company said yesterday that “the new governance structure strengthens the composition of the Board of Directors over the long term and achieves representation of all stakeholders in line with best corporate governance practices”. According to the company, the decision was taken by “unanimous vote of all of its Board members”.

The fund Oceanwood acquired capital in the hotel group after Santander placed 8.5% of its capital in the market. Santander had, in turn, received the stake from Grupo Inversor Hesperia as payment for some of its debt. BlackRock and Henderson then also became shareholders. These funds requested that NH’s Board strengthen the role of its independent directors to prevent the Chinese group HNA from strengthening its stake and position on the management body, without launching a takeover – it is not obliged to do so until its shareholding exceeds 30% – . HNA has four seats on NH’s board, compared with Hesperia, which has two.

Original story: Cinco Días (by L.S.)

Translation: Carmel Drake