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A turbulent period could be looming for Sherritt International Corp., as an activist investor is challenging the company just as its long-time chairman and figurehead retires.
Scott Leckie of Takota Asset Management is calling on Toronto-based Sherritt to buy back more stock and study a potential lawsuit against SNC-Lavalin Inc., which he believes is responsible for cost overruns and delays at the company’s Ambatovy nickel project. He said he took his complaints public after Sherritt ignored three private letters.
“[Sherritt CEO] David Pathe has said they’re in a position to respond to opportunities. To me that means they have excess capital above and beyond anything they’re going to need for the last bits and pieces of Ambatovy,” Mr. Leckie said in an interview.
Sherritt also quietly revealed in a filing that chairman Ian Delaney, 69, is retiring from the company and is not standing for re-election at the annual meeting later this month.
He has been Sherritt’s dominant personality since he seized control of it in a proxy fight in 1990, and his departure leaves a major gap. But it does not come as a shock; in late 2011, he passed the CEO job on to Mr. Pathe and said he was content with the state of the company.
Mr. Delaney was the key player behind all of Sherritt’s big moves over the last couple of decades, including its controversial investment in Cuba and its acquisition and development of the US$5.3-billion Ambatovy mine in Madagascar.
His replacement as chairman is Harold (Hap) Stephen, a name that will raise some eyebrows. Mr. Stephen is a restructuring expert best known for his work on the reorganizations of many Canadian companies, including Stelco Inc. and CanWest Global Communications Corp. While he has been a director at Sherritt for nearly a year, his enlarged role could boost speculation that the company will consider shaking up its corporate structure to unlock value.
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