Origo Partners has responded to a press release put out this morning by Brooks Macdonald (one of its largest investors). The two are already in dispute about Origo’s convertible zero dividend preference shares (CZDPs – NB you won’t find these on our zeros sheet as they are a more complex beast than most zero issues). This morning Brooks (in a statement that wasn’t published by the stock exchange in connection with Origo Partners but was tagged against Brooks MacDonald) said it talked to Cantor Fitzgerald Europe and together they had concluded that many of them also had concerns about “regarding the corporate governance, performance, investment strategy and prospects of Origo”. On that basis Brooks have come up with a set of proposals that comprise:
- making a number of changes to Origo’s board in order to establish an independent board of non-executive directors with a more rigorous approach to corporate governance (whilst Brooks Macdonald is proposing board changes, it has not proposed any specific individuals as potential appointees);
- changing Origo’s investment policy to one of orderly realisation;
- if required to enable the orderly realisation of Origo’s assets, extending the life of the CZDPs by up to one year;
- introducing an incentive arrangement for Origo’s investment management team, based on a goal of maximising value for Origo’s ordinary shareholders from an orderly realisation of assets, thereby aligning the interests of the management team with those of shareholders during the realisation process;
- establishing a simple and transparent basis for apportioning capital available to be returned to shareholders during the managed wind down between CZDP holders and Origo’s ordinary shareholders (rather than requiring the CZDP holders to be repaid in full before any capital is returned to the holders of Origo’s ordinary shares); and
- resolving the omission of the Put Option by removing the conversion provisions of the CZDPs.
Origo Partners is saying it “has in fact been engaged in a detailed consultation with certain of its shareholders, alongside its advisers Smith & Williamson, and Brooks MacDonald and its advisers, Cantor Fitzgerald, regarding the proposals”.. “for some time”. They also say they are “currently in the process of finalising a set of detailed proposals which are expected to include: changes in the Company’s management structure; investment strategy; asset realisation programme; and management incentive plan associated with asset realisation.”
Origo say they were planning to publish these and ask shareholders for their approval.
It is not obvious to us whether Brooks Macdonald actually plans to call an EGM to put its proposals to shareholders – watch this space!