In the letter, Monarch criticized Scorpio Bulkers Inc (NYSE:SALT) for not giving them a chance to have a face-to-face meeting with independent directors of the company.
“Following nearly a month of attempts, we have been unable to secure the Company’s agreement (through the Board’s Chairman) to make at least one independent director available to us without a member of senior management present. Because of the company’s refusal, while we would have preferred a face-to-face meeting to begin a dialogue on these matters, we believe that we have no alternative but to speak to the independent directors through this letter.”
Monarch wants Scorpio Bulkers Inc (NYSE:SALT) to resume its asset sale program and use the proceeds to buy back stock. The company’s stock trades at a deep discount to net asset value (NAV) and any buybacks of stock will be accretive to NAV, according to the investor. In addition, Monarch urges the company to add two new independent directors to the board in order to better align the company with shareholder interests.
Further, Monarch states in the letter that Scorpio Bulkers Inc (NYSE:SALT) should improve shareholder communications with the company’s board. The investor advises the company to make the lead independent director available for quarterly meetings with the largest shareholders and hire an investor relations firm to inform the directors of the manner in which the company and its management are perceived by investors and the reasons why the company’s common stock trades at a meaningful discount to its peer group.
“We believe this feedback from sophisticated investors will help the Board make better decisions and give the Company a valuable source of information separate and apart from management,” Monarch notes.
Moreover, Monarch urges the company’s board to institute special procedures for equity offerings, and the company should publicly disclose full copies of all material agreements with the Scorpio Group and its affiliates that have not been previously disclosed.
“We renew our request for a meeting with either the lead independent director or all of the independent directors as a group outside of the presence of management to discuss the above proposals as well as the circumstances surrounding the recent equity offering and other concerns that we have,” the letter also says.
Finally, the shareholder added it believes that the company’s unwillingness to make the independent directors available for a meeting, free of management, is an indication that the independent directors are not operating independently of management.
“We call on the independent directors to reconsider this position and look forward to hearing from you at your earliest convenience, according to the letter.”
Disclosure: none
