Financing company Thorn Group will hold an important Annual General Meeting (AGM) this Friday, the 30th of August. Thorn is a significant and poorly performing investment for the Forager Australian Shares Fund. Friday’s meeting is a chance for Thorn shareholders to vote for change at a board level. We hope the proposed board changes will give the business a better chance of realising shareholder value over the coming years.
Three new directors are being proposed for the board (resolutions 3, 4 and 5). One of those being proposed (Mr Bird) is well known to me personally. The two other proposed directors are non-independent representatives of Thorn’s largest shareholder, Somers Limited.
In our view all three candidates will likely bring some much-needed skills and experience to the board room.
It is our current intention to vote as follows on each of the AGM resolutions:
Adoption of Remuneration Report (Resolution 1)
To consider and, if thought fit, to pass the following Resolution as an ordinary resolution: “That for the purpose of Section 250R(2) of the Corporations Act 2001 (Cth), and for all other purposes, approval is given for the adoption of the Remuneration Report (which is set out in and forms part of the Directors’ Report) for the year ended 31 March 2019.”
Forager’s current intention is to vote AGAINST resolution 1.
Re-election of Mr Stephen Kulmar as a director (Resolution 2)
To consider and, if thought fit, to pass the following Resolution as an ordinary resolution: “That Mr Stephen Kulmar, who retires in accordance with rule 48(a) of the Company’s constitution and being eligible for re-election in accordance with rule 48(b) of the Company’s constitution, be re-elected as a director of the Company.”
Forager’s current intention is to vote AGAINST resolution 2.
Election of Mr Kent Bird as a director (Resolution 3)
To consider and, if thought fit, to pass the following Resolution as an ordinary resolution: “That Mr Kent Bird, being duly nominated to be appointed as a director of the Company in accordance with rule 45(b) of the Company’s constitution, be elected as a director of the Company.”
Forager’s current intention is to vote FOR resolution 3.
Election of Mr Allan Sullivan as a director (Resolution 4)
To consider and, if thought fit, to pass the following Resolution as an ordinary resolution: “That Mr Allan Sullivan, being duly nominated to be appointed as a director of the Company in accordance with rule 45(b) of the Company’s constitution, be elected as a director of the Company.”
Forager’s current intention is to vote FOR resolution 4.
Election of Mr Warren McLeland as a director (Resolution 5)
To consider and, if thought fit, to pass the following Resolution as an ordinary resolution: “That Mr Warren McLeland, being duly nominated to be appointed as a director of the Company in accordance with rule 45(b) of the Company’s constitution, be elected as a director of the Company.”
Forager’s current intention is to vote FOR resolution 5.
Increase in the maximum aggregate amount of annual directors’ fees payable to non-executive directors (Resolution 6)
Forager’s current intention is to vote AGAINST resolution 6.
Note that the statements of current intention set out above are not binding on Forager. The publication of this material is not financial advice. It has not been prepared taking into account any person’s financial position other than Forager’s. Whilst we would welcome other shareholders voting as set out above, each Thorn shareholder should make their own decision on how to vote and take such professional advice they believe appropriate in all of the circumstances.
Steve, excellent people engineering for the long term
Thanks for sharing. This reminded me to vote my direct holding, and along similar lines.
Steve,
It was great to see the results of Thorn AGM going the way Forager wanted.
I will be interested to see Forager’s response to today’s (16th Sep 2019) trading halt and non-renounceable issue for Thorn. Are you in favour of the raising?
Me too. Look forward to the update on this.
Hi Neil and thanks. They need the money to settle the class action and we’re definitely supportive of putting that issue behind the company. We’ll write more about the prospects from here in the September quarterly.
Regards,
Steve
Steve
Will Forager be explaining its reasons for backing the cap raising? As a Forager investor who also holds TGA privately, I’m struggling to see a reason to stay on board when what appears to have been the best path to shareholder benefit has been passed up.
Thanks
Hi Travis and Rebecca, Steve here.
We’re hopeful that this will be a profitable investment for us from here – and certainly haven’t given up on any of the strategic options open to the company – but it’s probably more appropriate for us to comment after the Retail Entitlement Offer closes on 2 October 2019. Forager has partially sub-underwritten the Entitlement Offer and could be allocated a proportion of any shortfall in the retail take-up. So we have a vested interest in the level of take-up and don’t want appear to be influencing the outcome.
We’ll elaborate on our views in the upcoming September Quarterly report.
Hi
I’ll be interested to hear the thesis that Thorn is worth more in an attempted turnaround net of significant costs of the renounceable issue.
Cheers, Geoff
Hi Geoff, please see my response above.
Apologies but I can’t say any more at the moment.
Regards,
Steve
Hi Steve,
I really appreciate Forager posting publicly on how it intends to vote at the AGM.
TGA really needs leadership from the top. I think one of the problems with TGA has been a lack of cornerstone active major shareholders.
This has permitted in years gone by a potential ‘snouts in the trough’ mentality and now shareholders are reaping the consequences.
Hello Steve,
Could you please let us know if you are still positive regarding TGA long-term results?