Weyburn Inland Terminal announced on Friday the board will be pursuing expressions of interest to buy part or all of the business and that two members of the board of directors resigned.
Dale Mainil, nephew of founding WIT board president Art Mainil, and Allan Richards both resigned on Wednesday stating a fundamental disagreement with the strategic direction the board had adopted to pursue the potential sale of the company as their reason.
Mainil was contacted but said he and all current and previous board members are under confidentiality obligations, which he said he has never broken, and he could not disclose any specifics.
The announcement from the board said they are pursuing and negotiating expressions of interest with two objectives: to maximize the value and liquidity for shareholders and to provide a strong, competitive environment for its customers.
“I think we’re providing a very strong and competitive environment for our customers,” said Rob Davies, CEO of WIT. He said he thinks their customers would agree. “We want to make sure we’re continuing to do so in the future.”
The board’s announcement stated there would be no specific time table and Davies agreed, but said they would try to have something together for the shareholders to review “as soon as we can.” Davies said the board is still reviewing their options at this point and there is no guarantee the company will even be sold in part or entirely.
When asked about concerns that selling WIT would reduce the farmer-owned, farmer directed philosophy the company was founded on, Davies said “that will be something for the shareholders to decide.” If any transaction is approved by the board, it will be presented to the shareholders for their review and ultimate approval.
President of the board, Claude Carles, said liquidity was a concern which prompted the decision to look at potential buyers. “We’ve discussed it for a number of years,” he said.
“Why does WIT have to be sold?” asked Kara Cubbon, Art Mainil’s daughter, who is not pleased with the announcement and does not think her father would have been either.
Cubbon said the Mainil family wants WIT to be a successful business and questioned why WIT needs to be sold when the business typically has strong profits. She was also concerned that farmers should remain the company’s first priority.
“He was not pleased whatsoever when it first came up,” said Cubbon of her father’s reaction to the first time selling WIT came up years ago. “I think my father would be very proud of his nephew, Dale.”
“He certainly represents the Mainil family well,” said Cubbon of Dale, and added that her cousin has a strong sense of ethics which must have led him to decide to resign.
“He must have felt the board was not making decisions in the best interest of shareholders,” she said.
“I’m not sure it’s being made public why the company should be sold.
They should allow the shareholders to make informed and educated decisions on their own,” she said, and added that there seems to be a lot of backdoor deals happening.
“WIT is such an important facility in Weyburn. It’s a facility to be proud of,” said Cubbon.
As a part of the review of strategic options undertaken by the board, WIT amended CEO Rob Davies’ employment agreement with the hopes of ensuring continuity and support during the process. The agreement permits Davies to quit any time after Wednesday, Jan. 15, 2014 and receive a retention payment equal to 15 months’ salary and a pro-rated bonus.