Walter Energy, Inc. (NYSE: WLT) (TSX: WLT) today issued a letter to its shareholders raising serious concerns about Audley Capital’s slate of nominees and highlighting the steps underway by the Company’s Board and new management team to increase shareholder value.
The letter from Chairman Michael T. Tokarz and CEO and Director Walter J. Scheller III highlights “troubling aspects” about Audley’s campaign to replace five of its nine independent directors, including the fact that Audley’s proxy statement contains serious omissions regarding the background and history of its nominees. These omissions include insider trading charges, deficient governance, and misrepresentations of experience.
Walter Energy said the Board’s Nominating and Corporate Governance Committee reviewed the Audley slate and determined that individually and collectively they lack the qualifications and experience to be suitable Board candidates. Walter Energy has a balanced mix of experience and expertise on its Board, and four of the 10 current directors have joined within the past two years.
“We are intensely focused on enhancing shareholder value by reducing debt levels, continuing to reduce SG&A expenses, and identifying alternatives for underperforming assets,” the letter states. “These initiatives are consistent with our objective of optimizing our portfolio and ensuring that each of our operations is cash flow positive and on a clear path to profitability under current market conditions and outlook.”The letter concludes: “Over the years your Board has created long term value for all stockholders with judgment and integrity. We recognize and accept the challenge of responding to the recent and dramatic decline in met coal pricing that has affected every company in this industry. Your Board and management have taken every reasonable step to respond to that trend and to position the Company for future profitable growth as conditions improve. That work should accrue to your benefit, not that of others. Now is not the time to reverse course.”
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