LONDON, UK – M&G Investments is calling for a wide array of changes at Gibson Energy, including the exit of all trucking business not linked to core infrastructure assets.
M&G holds 19.4% of Gibson’s outstanding shares, making it the company’s single-largest shareholder. The Calgary-based business stores, blends, processes, transports, and markets crude oil, liquids, and refined products, as well as providing oilfield waste and water management services.
The asset managers at M&G say they are disappointed with Gibson’s progress despite “significant pressure” applied behind the scenes, according to a letter to Gibson board chairman James Estey.
“We have long communicated our concerns about the company’s management since its IPO and our view that a more focused and strategic approach by management would benefit the company and its shareholders,” the letter reads.
Gibson Energy reported 141 trucks, 107 tractors, 1,100 trailers, 484 owner-operators, and 200 employees in the 2017 Today’s Trucking Top 100 list.
In addition to shedding trucks, M&G calls on Gibson to sell its Moose Jaw refinery and affiliated business, using proceeds to reduce debt or reinvest in high-return infrastructure investments, and to reduce costs. The investor wants the company to focus on “crown jewels” in the form of core infrastructure assets, namely terminals in Edmonton and Hardisty, Alberta, and to consider putting the entire business up for sale.
Rhodes did say that M&G is pleased with Gibson’s recent appointment of Steve Spaulding as Chief Executive Officer, and the plans to divest U.S. Environmental Services by the end of the year.
“We welcome M&G’s input and look forward to continuing our dialogue with M&G and our many other shareholders. M&G’s views and ours are aligned regarding our focus on infrastructure, the value of our Hardisty and Edmonton crude oil terminals, and our dividend policy, among other things,” Estey responded in a letter of his own.