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