13D Filing: M&G Investment Management Ltd and Methanex Corp (NASDAQ:MEOH)

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CUSIP No. 59151K108		13D		Page 4 of 6 Pages

Item 1. Security and Issuer.

This statement relates to the shares of common stock of Methanex Corp, a British Columbia corporation (the Issuer). The address of the
principal executive offices is:

800 Waterfront Centre, 200 Burrard Street, Vancouver, BC, V6C 3M1, Canada

Item 2. Identity and Background.

(a)	This Schedule 13D is being filed by M&G Investment Management Limited, a company incorporated under the laws of England and Wales.

(b)	The address of the principal office of M&G Investment Management is Governors House, Laurence Pountney Hill, London, EC4R 0HH.

(c)	The principal business of M&G Investment Management is investing in securities.

(d)	None of the reporting persons have, during the last 5 years, been convicted in a criminal proceeding (excluding traffic violations of similar misdemeanours).

(e)

None of the Reporting Persons have, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceedings was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source or Amount of Funds or Other Consideration.

The funds for the purchase of the Shares came from the investment capital of M&G Investment Management.

Item 4. Purpose of Transaction.

The
Reporting Persons believe that the current market price of the Shares does not reflect the Issuers intrinsic value. With this in mind, the Reporting Persons have an extremely strong view regarding the future capital allocation policy of the
Issuer going forward. We applaud the dividend policy of the Issuer and would like this to continue with no alterations. Our view on the future capital allocation policy is specific to the use of excess cash flow generated by the Issuer after
maintenance capital expenditure, interest and tax payments, as well as the dividend and other cash payments. We believe this excess cash flow should be solely directed towards share buybacks until the share price appreciates beyond the replacement
cost of their assets.

The Reporting Persons have been supportive shareholders since 2007 but have become repeatedly frustrated with the market
valuation of the Issuer, which the Reporting Persons believe does not reflect the Issuers intrinsic value.

The Reporting Persons are
supportive of the current progressive dividend policy of the Issuer, but given the current share price is significantly below the replacement cost of its assets (estimated by the Issuer to be US$1,100 per tonne (source : Methanex Investor
Presentation March 2017), the Reporting Persons view is that :

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any and all surplus capital outside the proposed modest capital expenditures targeted towards the issuers Chilean assets should be solely directed towards share buybacks until the share price appreciates beyond the replacement cost of the Issuers assets which based on the companys own disclosure equates to as much as double the current share price;

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that every share purchased at a discount to the replacement cost of the Issuers assets accretes significant value to all shareholders equally; and

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there should be no cash retained on the balance sheet beyond what is required to maintain the existing portfolio of assets to a high standard (which the Reporting Persons estimate conservatively to be a maximum of $200m).