Dockwise asks Court for Immediate Suspension of Fairstar Management
Sunday, 15 July 2012 | 00:00
Dockwise has, through its wholly-owned subsidiary Dockwise White Marlin B.V., requested the Enterprise Chamber of the Amsterdam Appellate Court to schedule a date to hear a request for the immediate suspension of the management of Fairstar Heavy Transport N.V. ("Fairstar"), more in particular of the Chairmen of the Supervisory and Executive Boards. Dockwise will, in addition, request the immediate appointment of new Supervisory and Executive Board members. The Enterprise Chamber court hearing is now set at 26 July 2012. The Enterprise Chamber procedure is in addition to Dockwise's earlier request to the Rotterdam court for authorization to convene an Extraordinary Meeting of Shareholders ("EGM") proposing the appointment of three supervisory board members at Fairstar in addition to the two current members. The Rotterdam court hearing is set at 20 July 2012.
In the current circumstances Dockwise has to initiate legal proceedings to protect the interests of the Fairstar - Dockwise combination and involved stakeholders.
Dockwise has, on various occasions, proposed to Fairstar to agree on finalization of the acquisition of Fairstar by Dockwise, more in particular on:
• the recommendation by Fairstar management for an offer on the remaining almost 5% of Fairstar shares not yet owned by Dockwise;
• information sharing on contracts, fleet completion and financing arrangements and other relevant matters;
• confirmation of Dockwise commitments to Fairstar stakeholders including job security for Fairstar employees and contract security for Fairstar clients;
• an exit arrangement for Fairstar management.
While Fairstar had, at some point in time, indicated it was willing to consider a recommendation, they were not willing to adequate provide information, dialogue was frustrated by Fairstar management and, proven by yesterday's press release from Fairstar announcing the intention of the management of Fairstar to pursue a bond issue, the Supervisory Board appears to have lost control of Fairstar management. Fairstar management seems to continue to act contrary to the interest of Fairstar, the Fairstar - Dockwise combination and its shareholders and stakeholders, certainly in the current situation whereby Dockwise holds over 95% of the shares and a combination of the companies is imminent. Fairstar management further taking steps to build the fifth vessel without any discussion and reassessment in the context of the combination of the two companies is unacceptable.
Fairstar made yesterday's announcement regarding the intended bond issue without the prior knowledge of its 95% shareholder Dockwise, while it had previously agreed not to issue bonds without the prior approval of Dockwise. In the meantime after yesterday's press release and response thereto by Dockwise, Fairstar indicated again that it will not issue the bonds without the approval by Dockwise.
It is unlikely that Dockwise will approve the bond issue. As indicated on many occasions the intended bond issue appears value destructive and not the right financing option for Fairstar. Other financing options also need to be taken into account from the perspective of the Fairstar- Dockwise combination including the previous offer by Dockwise to support and underwrite between USD 50-100 mln of new equity for Fairstar, which was not considered or discussed by the boards of Fairstar. In addition to the offers by Dockwise to support the financing of Fairstar through an equity issue or other ways, Dockwise remains willing to buy the Fairstar bonds from bondholders, including those that may exercise their put option.
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