National Post (Latest Edition)

UrtheCast’s AGM promises to be tense affair

Four new directors can’t vote in tactic holders call ‘bullying’


If events over the past week are any indication, the June 25 annual meeting of UrtheCast Corp. has the potential to be a dandy given that shareholde­rs have a slew of governance and price performanc­e perspectiv­es to be upset.

The Vancouver-based satellite company, which has extensive operations in Spain and which three years back raised equity at $4 a subscripti­on receipt, has replaced three of its Canada-based directors, kept two and brought in four nominees, all American, who according to the circular, have no equity stake.

Some shareholde­rs have used the word “bullying” to describe matters that are occurring a few weeks after UrtheCast, named the country’s fastest growing tech company by Deloitte 18 months ago, raised $34 million of equity and snared a US$142million secured credit facility.

“All the shareholde­rs are perplexed. What happened?” asked one shareholde­r who has watched the shares fall from about $1.50 in December to 28 cents on Friday. In his view, two press releases, neither positive to shareholde­rs, played key roles. “We were on the cusp of building the most revolution­ary new satellites that are going to disrupt the industry. And now this.”

The company’s chief financial officer didn’t return a call seeking a comment.

But the board coup is not a slamdunk. Before management’s six nominees get elected, shareholde­rs have to approve a bylaw amendment allowing 75 per cent of its directors to be non-Canadian residents. Given the record date is May 8, shareholde­rs can be expected to take umbrage at what amounts to a takeover without a premium.

If that bylaw change is not approved, the meeting could get very complicate­d.

One patient long-standing shareholde­r said, “the old shareholde­rs will look at the new slate and think it’s laughable.” Added another: “It’s a sad commentary that Canadian shareholde­rs who have been supporting the company don’t have representa­tion on the board.” It’s understood potential directors designed to represent such shareholde­rs were advanced but rejected.

Noel Atkinson, an analyst at Clarus Securities, said he hopes “the turbulence in the management and board ranks … is short-lived and the go-forward business … can convince current and prospectiv­e customers to move past the noise.” Clarus, along with Canaccord, raised $20.7 million of equity, part of the $34-million raise.

The board activity has been frenetic. Greg Nordal (interim chief executive) resigned this week. Another, Letitia (Tish) Long, decided not to stand for re-election, while on Thursday the company said Tye Burt, chairman for most of the time UrtheCast has been public would, contrary to what was said the day before, be leaving immediatel­y and will not be at the annual meeting. No reason was given for his resignatio­n. Calls left with Burt, who is understood to have voted against the new slate, were not returned.

Instead Adam Vore, appointed to the board on May 25, will be interim chair until the meeting, after which the “reconstitu­ted Board will appoint a Chair.” (Mark Piegza, another newcomer, was also appointed to the board on May 25.) In the circular, Vore is listed as managing director of Seaport Global Securities, while Piegza is the founder of Convergenc­e Advisors. The board has determined Vore is independen­t — even though his firm, Seaport, acted as the company’s adviser on its recent senior secured financing. A call to Vore seeking a comment was not returned.

Both Vore and Piegza were named to the board under a backstop agreement between the company and a numbered B.C. company. (Vancouver-based Skidmore Group is believed to the backstop party. We were unable to reach Rick Christiaan­se, Skidmore’s chief commercial officer and the person named in the documentat­ion for confirmati­on.)

Atkinson said the numbered company bought about US$6 million in the non-brokered private placement and agreed to provide another US$6 million to support the company’s Spanish bank debt restructur­ing/repayment.

Stay tuned. It promises to be busy.

 ?? URTHECAST ?? The Vancouver-based satellite company UrtheCast was named 18 months ago by Deloitte the country’s fastest growing technology company.
URTHECAST The Vancouver-based satellite company UrtheCast was named 18 months ago by Deloitte the country’s fastest growing technology company.
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