15 June 2015 – Expansión
The Chinese giant, which holds a 29.5% stake in the NH Group and has four directors on the Board, will ask the other shareholders to fix the number of board members at 11, in order to limit the advances of foreign funds.
HNA, the primary shareholder of the NH Group, with a 29.5% stake, will ask the hotel group to fix the number of members on the Board of Directors at 11, at the AGM on 29 June. HNA justifies the proposal, which has been included as an additional item on the meeting agenda, as being “in the interest of greater legal certainty”.
With this proposal, HNA is flexing its corporate muscles and seeking to close the door on NH’s foreign fund investors, by making the incorporation of new directors conditional on existing positions becoming vacant.
Currently, NH’s Board of Directors comprises 11 people, even though the company’s bylaws provide for a minimum of five members and a maximum of 20…The Chinese group already holds four seats on the Board and the Hesperia investor group has two. There are three independent directors and the Chairman (Rodrigo Echenique) and CEO (Federico González) also hold a seat each (…).
In order to stand up to NHA, three overseas fund managers (Oceanwood Capital, BlackRock and Henderson) purchased most of Banco Santander’s shares, which were sold on 21 May. Soon afterwards, Oceanwood, which holds a 7.7% stake, formally requested to join NH’s board (…).
The fear of the funds (minority shareholders) is that, if there is no increase in the number of independent directors, then HNA will strengthen its control over NH without having to launch a takeover bid (OPA) for the shares (…).
On the other side of the table is HNA, an Asian giant, which has demonstrated its desire to take control of the Spanish chain, since it first acquired a stake in the group in 2013. It seeks to continue as a major shareholder, but without acquiring 100% of its shares (…).
In parallel, HNA has opened the door to the Asian market to its investment company. Both companies created a joint venture with a Chinese majority, which will allow NH to debut in the country. In 2015, the Spanish chain will manage six hotels (in China) and the aim is to exceed 30 properties under management over the medium term.
Meanwhile, NH is continuing to improve its results. Between January and March, it generated revenues of €272.3 million and reduced its net losses by 24.7% to €29.1 million. On Friday, NH’s share price was down by 1.63% to €5.11.
Original story: Expansión (by Yovanna Blanco)
Translation: Carmel Drake
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Source:: AURA Real Estate Experts