Board of directors split | Two directors resign over the decision to seek potential buyers
The possible sale of all or part of Weyburn Inland Terminal has prompted two board members to resign and set off speculation about potential buyers.
There was no definitive agreement at press time, and any sale would only go forward after shareholders vote, said chief executive officer Rob Davies.
In fact, it might not happen at all, depending on future board decisions.
The board had earlier pursued expressions of interest, and last week announced that several potential buyers had expressed non-binding interest.
The majority of the board has decided to develop a transaction agreement that would maximize value and liquidity for shareholders while providing a competitive environment for customers.
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The decision resulted in the resignations of Allan Richards of Rouleau, Sask., and Dale Mainil of Weyburn, Sask., who disagreed with the direction the board has chosen.
Davies said the objectives of liquidity and competition must be met if the remaining board members decide to present shareholders with a possible transaction.
He would not comment on who the potential buyers are or how many expressed interest.
“We’ll be trying to work towards getting one specific agreement for the board to consider whether they should take that to shareholders or not,” he said.
“The board’s job is to look at information that every shareholder doesn’t see and to make decisions, and so they believe the time may be right to provide shareholders with an option.”
He said the company is strong, but shareholder liquidity is a concern.
“We have a lot of people that have made significant investments in the company over the years and the younger generation has not been as aggressive at buying shares as some of their fathers and grandfathers were,” Davies said.
“So for folks that have significant investments in the terminal, at some point in time as they retire, they’re going to want some liquidity.”
He said the board also wants to ensure a strong competitive presence.
It wants Davies to remain through the review process but has amended his employment terms to allow him to end his 15 year career at WIT any time after Jan. 15, he added.
He would receive a retention payment equal to 15 months’ salary and a pro-rated bonus.
Davies would not comment further on that issue. There is no timeline to reach an agreement.
WIT shares trade publicly and closed at $12.90 for the week ending Dec. 13, which equals the 52-week low. The high for the year has been $13.15.
There are 5.46 million common shares, and the company has a market capitalization of $70 million.
WIT is best known for its farmer-owned and directed concrete terminal established in 1976 just outside Weyburn. It has a controlling interest in NorAmera BioEnergy Corp., an ethanol plant in the city.
It also owns Vigro Seed and Supply at Sedley, Sask., where it processes and markets special crops.
Grain handling earned $1.284 million in the first nine months of this year, while crop production services earned $1.656 million.
However, the ethanol plant lost $1.686 million.
Davies said the company has done well since CWB lost its single desk marketing monopoly for wheat.
