LUXEMBOURG - Saturday, 15. March 2025 AETOSWire
Annual General Meeting is scheduled for 3 April 2025
Board of Director Nominees Ellen Lord and John Shaw to provide critical expertise and U.S. perspective
Board of Directors unanimously decides to reduce Its size and change Its composition
Company reiterates Its strategy and opportunities to deliver long-term shareholder value
Board of Directors unanimously supports the Non-binding Agenda Item received from Atlas
(BUSINESS
WIRE) -- SES S.A. (“SES” or the “Company”) today issued the following
statements in relation to the Company’s upcoming Annual General Meeting
(“AGM”), taking place on 3 April 2025:
Proposed Additions to SES’s Board of Directors
The Company is pleased to propose the addition of two new members, Ellen Lord and John Shaw, to its Board of Directors.
Ellen Lord is the former Under Secretary of Defense for Acquisition and
Sustainment of the United States Department of Defense and has board
experience with listed and non-listed companies, including Voyager Space
Holdings Inc., National Defense Industrial Association and Defense
Technology Initiative.
John Shaw is a former Deputy
Commander of the U.S. Space Force and first Commander of the USSF Space
Operations Command and Combined Forces Space Component Command.
The
Company believes that adding the unique and valuable experience and
skillsets of Ellen and John to its Board, both of whom bring direct
experience in U.S. Department of Defense and U.S. Space Force and a
wealth of experience in the U.S. market, will have significant benefits
for the Company. The Board is confident that Ellen and John will
contribute to the Company’s success as the market continues to evolve.
Ahead
of this year’s AGM, SES thoroughly reviewed its board composition to
ensure the right balance of skills and experience are present to meet
the evolving landscape of the satellite industry. Throughout this
review, the Board recognised the need to enhance its collective
expertise by appointing individuals with a deep-rooted understanding of
the U.S. market and the space economy evolution to help position the
Company to effectively navigate this rapidly changing landscape.
As
part of the Company’s commitment to maintaining a strong and effective
board, the Company, with help from the Nomination Committee, initiated a
search process aimed at identifying well-qualified and suitable
candidates to enhance the overall skillset and experience of the Board
to better align with the Company’s strategic direction. Through this
careful process the Company identified Ellen and John as excellent
candidates to join its Board of Directors, and the Board unanimously
recommends that shareholders vote in favour of the Company’s proposed
Agenda Item to approve their appointments. The appointment of John is
subject to final clearance.
As highlighted in the Company’s Full
Year 2024 results release on 26 February 2025, the Board expects to
review its composition regularly and make necessary adjustments,
including evaluating the tenure of existing Board members, to ensure it
remains highly effective and strategically positioned for future growth.
Taking
into account views expressed by shareholders to the Company, the Board
has unanimously decided to reduce its size to 9 members, including
adding further capital markets experience to the Board, prior to or at
the Company’s 2026 AGM, in a process led by the Nomination Committee to
commence immediately. Until such changes take effect, the Company
proposes to maintain its current board size of 11 members.
Non-binding agenda item received from Atlas
The
Company notes that it has received the non-binding agenda item from
Atlas Infrastructure Partners (“Atlas”) set out in the Appendix to this
announcement for reference, which the Company intends to include in the
updated agenda for its forthcoming AGM.
SES appreciates the
constructive engagement from Atlas around the Company’s previously
announced position relating to shareholder remuneration as set out in
the Company’s Full Year 2024 results release on 26 February 2025, and is
supportive of Atlas’ proposed agenda item. The Board unanimously
recommends that shareholders vote in favour of Atlas’ proposed agenda
item.
Response to Appaloosa LP’s non-binding Agenda Item (Resolution 21) and the non-voting Discussion Items
SES
appreciates the perspectives of all our shareholders and their
constructive ideas about our business. While the Company is committed to
maintaining open and constructive dialogue to deliver long-term
shareholder value, the Board believes that Resolution 21 proposed by
Appaloosa LP (“Appaloosa”), and Appaloosa’s proposals contained in the
non-voting Discussion Items, are not in the best interests of the
Company and its shareholders and unanimously recommends shareholders
vote against Resolution 21.
Paragraph 1 explains why the Board is
unanimously recommending that the shareholders vote against Appaloosa’s
non-binding proposal (Resolution 21). Paragraphs 2 to 5 explain why the
Board believes that Appaloosa’s proposals set out in Discussion Items 1
to 4 are not in the best interests of the Company and its shareholders.
Appaloosa’s
non-binding voting Agenda Item (Resolution 21) and Appaloosa’s
proposals set out in the Discussion Items are set out in the Appendix to
this announcement for reference.
1. Company’s Current Plans to Return Capital to Shareholders are Aligned with SES’s Long-Term Goals (Resolution 21)
Appaloosa
has proposed Resolution 21 in the Company’s AGM Agenda. The Board
unanimously recommends that shareholders vote against Resolution 21.
In
summary the Board believes that Resolution 21 is unnecessary and seeks
to deny essential flexibility for the Board and management of the
Company to manage the affairs and liquidity of the Company in the best
interests of the Company, its shareholders and other stakeholders. The
proposal in Resolution 21 may jeopardise the Company’s investment grade
credit rating and burden the Company with significant uncertainty.
SES
has already confirmed a clear intent to prioritise shareholder
remuneration while maintaining investment grade metrics and driving
sustained, profitable growth and value creation.
As announced in
the Company’s Full Year 2024 results release on 26 February 2025, in
terms of capital allocation, the Company remains committed to investment
grade metrics, profitable investments, and a stable to progressive
dividend policy. The Company also confirmed that as it meets its net
leverage target (Adjusted Net Debt to Adjusted EBITDA) of below 3 times
within 12-18 months after closing the Intelsat transaction, the Company
intends to increase the annual base dividend and then prioritise
shareholder remuneration when allocating any future exceptional cash
flows of the combined company.
SES’s total cash returns to
shareholders since 2021 have been approximately EUR 1.2 billion, which
is over 100% of its Adjusted Free Cash flow over the same period. SES
continues to prioritise shareholder remuneration and remains sector
leading in terms of returning capital to its shareholders.
The
Board believes that it is in the long-term interests of the Company and
its shareholders that SES retains a healthy balance, as per its current
financial policy, between shareholder returns, maintaining investment
grade metrics and keeping some flexibility for accretive growth
investments to support the Company’s competitive position in the market.
It
should be noted that Resolution 21 sets a gross debt to EBITDA
threshold of 3.75 times, which is likely to put the Company’s investment
grade credit rating at risk, and detract from the flexibility the
management and Board of the Company would otherwise have to manage the
affairs of the Company to avoid this negative outcome. In Moody’s report
dated 26 February 2025, it updated its investment grade ratings gross
debt to EBITDA threshold range for the Company from 3.25-3.75 times to
2.75-3.25 times.
Resolution 21 artificially constrains the
Board’s ability to allocate capital to the items listed in Resolution 21
only. It prioritises increased shareholder remuneration in the short
term and ignores the necessity for the Board to have agility to respond
to a changing macro-economic and competitive environment which could
jeopardise the Company's trajectory and long-term future growth. Our
strategy balances strategic investments, which are expected to drive
long-term growth and sustainable cash flow generation in-line with our
established IRR threshold of 10%, with an approach to shareholder
remuneration that appropriately addresses the company’s capital
allocation priorities.
Resolution 21 is proposed as a non-binding
Agenda Item, and it would not be binding in accordance with Luxembourg
laws as it entirely fetters the Board’s discretion regarding all future
capital allocation decisions. However voting in favour of the resolution
would nonetheless leave the Company burdened by significant
uncertainty, and be neither in the short or long term interests of
shareholders.
2. Reorganisation of the Share Capital Structure of the Company (Discussion Item 1)
The
non-voting Discussion Item 1 in the Company’s AGM Agenda was proposed
by Appaloosa. The Board has unanimously decided that it does not support
Discussion Item 1.
The Luxembourg Government is an anchor
shareholder of the Company since inception, and its holding in the
Company is viewed as important to its strategic national interests. Its
holding of B Shares gives it valuable rights which pursuant to
Luxembourg law cannot be taken away from it by a vote, whether binding
or non-binding, of other shareholders.
In any event, SES
considers the Luxembourg Government to be a valuable shareholder and
stakeholder in the Company and the Luxembourg Government has on numerous
occasions confirmed its strong support for the Company.
The
Board also wishes to note that as these rights are fully disclosed and
form part of the Articles, all investors would have invested in the
Company on the basis of the existing shareholding structure and these
rights.
The Board also notes that the Class B Shareholders are
entitled to appoint such number of directors which comprise no more than
one third of the total number of directors on the Board, and as such
the Class B shareholders cannot dictate strategy and do not in practice
inhibit management’s ability to execute on the Company’s profitable
growth strategy. The Board also notes that the economic interests of all
shareholders are already fairly and proportionately aligned.
3. Reorganisation of the Board (Discussion Item 2)
The
non-voting Discussion Item 2 in the Company’s AGM Agenda was proposed
by Appaloosa. The Board has unanimously decided that it does not support
Discussion Item 2.
As explained above, the Board considers that
its current composition and its approach to carefully planned
refreshment of its membership, in accordance with the recommendations of
its Nomination Committee, ensures a good balance of skills, experience,
and continuity in the Company’s leadership body. The composition of the
Board, which has reduced in size from 18 members in 2016 to 11 members
in 2024, is also broadly aligned with the Company’s competitors and
peers, as well as governance and market standards.
As noted above the Company has already proposed two highly qualified new candidates to its Board, Ellen Lord and John Shaw.
Furthermore,
as explained above, the Board is committed to continuously improving
its composition over time, including evaluating the tenure of existing
Board members. The Company’s goal is to ensure the Board is equipped
with diverse range of skills, perspectives and experiences that will
guide the Company towards its next phase of success.
The Board
has carefully considered feedback received from shareholders and, as
noted above, in any event proposes to reduce its size and further
refresh its composition prior to or at the Company’s AGM in 2026.
Discussion
Item 2, among other items, calls for the removal of the entire board,
the replacement of the Board with a smaller number of directors, who are
unspecified, including two new members of the Board, who are also
unspecified. It also calls for the removal of the current procedure for
Board appointments as between the A and B shareholders, including the
existing involvement of the Nomination Committee. This would be a
chaotic and unnecessary approach, in contrast to the Company’s own
careful approach to identifying highly skilled new Board members, and
ensuring it has an appropriate balance of skills and experience in its
Board composition over time.
4. Ownership and Transfer of Shares (Discussion Item 3)
The
non-voting Discussion Item 3 in the Company’s AGM Agenda was proposed
by Appaloosa. The Board has unanimously decided that it does not support
Discussion Item 3.
As noted above, the Luxembourg Government is
an anchor shareholder of the Company since inception, and its holding in
the Company is viewed as important to its strategic national interests.
The Company’s Articles were established in consultation with the
Luxembourg Government and Article 5 of the Articles is intended to
safeguard Luxembourg’s national strategic interests in SES.
These
rights are fully disclosed and all investors would have invested in the
Company on the basis of the existing shareholding structure and these
rights.
In any event, SES considers the Luxembourg Government to
be a valuable shareholder and stakeholder in the Company and the
Luxembourg Government has on numerous occasions confirmed its strong
support for the Company.
5. Amendments to the Articles (Discussion Item 4)
The
non-voting Discussion Item 4 in the Company’s AGM Agenda was proposed
by Appaloosa. The Board has unanimously decided that it does not support
Discussion Item 4.
This Discussion Item proposes to make changes
to the Company’s Articles to reflect Appaloosa’s other proposals. For
the reasons noted above, the Company does not support Discussion Item 4.
Documents for the AGM can be found here.
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About SES
SES
has a bold vision to deliver amazing experiences everywhere on Earth by
distributing the highest quality video content and providing seamless
data connectivity services around the world. As a provider of global
content and connectivity solutions, SES owns and operates a
geosynchronous earth orbit (GEO) fleet and medium earth orbit (MEO)
constellation of satellites, offering a combination of global coverage
and high-performance services. By using its intelligent, cloud-enabled
network, SES delivers high-quality connectivity solutions anywhere on
land, at sea or in the air, and is a trusted partner to
telecommunications companies, mobile network operators, governments,
connectivity and cloud service providers, broadcasters, video platform
operators and content owners around the world. The Company is
headquartered in Luxembourg and listed on Paris and Luxembourg stock
exchanges (Ticker: SESG). Further information is available at:
www.ses.com
APPENDIX: SHAREHOLDER PROPOSALS
PART A: ATLAS NON-BINDING VOTING ITEM
1. Non-binding resolution on capital returns to shareholders
ATLAS
supports the company announcement on the 26th of February 2025
regarding the intention for a stable to progressive dividend and capital
return policy in the future, as the company meets its leverage targets,
including the intention with regards to any proceeds from any future
exceptional cashflows of the combined company. ATLAS would support a
determination by the board in these circumstances that at least a
majority of such future exceptional cashflows will be prioritised for
return to shareholders.
PART B: APPALOOSA NON-BINDING VOTING ITEM
2. Resolution 21 - Non-binding resolution on capital return to shareholders.
The
Shareholders’ Meeting requests the board of directors of the Company
(the Board) to implement an annual capital return to the shareholders of
the Company, which shall amount to the surplus capital of the Company,
defined as the sum of (a) cash and short-term investments in excess of
Euro 200 million at the beginning of the fiscal year; (b) cash from
operations during the fiscal year; and (c) proceeds from asset sales
(including spectrum proceeds) during the fiscal year; less (i) debt
repayments necessary to reduce the ratio of gross debt-to-EBITDA
(excluding ongoing transaction-related expenses) to a threshold of
3.75x; (ii) capital investments made during the fiscal year to maintain
the Company’s GEO satellite network; (iii) the equity component of funds
expended during the fiscal year to complete the build-out of the
Company’s existing MEO network; and (iv) the funds needed to complete
the Intelsat stock purchase transaction pursuant to the Share Purchase
Agreement dated April 30, 2024.
PART C: APPALOOSA NON-VOTING DISCUSSION ITEMS
1. Reorganisation of the share capital of the Company.
Discussion
on the conversion of all the outstanding class B shares in the Company
(the "Class B Shares") into new class A shares in the Company (the
"Class A Shares"), based on a ratio of zero point four (0.4) new Class A
Shares for one (1) Class B Share and suppression of classes of shares
within the share capital of the Company, and conversion of all
outstanding Class A Shares into ordinary shares in the Company.
2. Reorganisation of the Board.
Discussion
on (i) the amendment of the articles of incorporation to limit the size
of the Company's board to a maximum number of 9 members, each of which
shall be elected annually, (ii) the revocation of all current members of
the Board with immediate effect, (iii) the appointment of up to 9
members to the board, of which at least two shall be new members with no
prior service on the board, and (iv) the amendment of (a) article 9 of
the articles of association of the Company to delete the existing
nomination process and grant the Government the right to nominate a
number of Board members proportionate to its shareholding for
appointment, and (b) articles 11 and 12 of the articles of association
of the Company to delete the requirement and existence of
vice-chairpersons.
3. Amendment of article 5 of the articles of
association of the Company to remove restrictions on the ownership and
transfer of shares in the Company.
Discussion on the amendment of
article 5 of the articles of association of the Company to remove any
restrictions on the ownership and transfer of shares in the Company.
4.
Amendment and full restatement of the articles of association of the
Company, without changing the corporate object of the Company, to
reflect the proposed changes referred to under discussion items 1, 2 and
3 above.
Discussion on the amendment and full restatement of the
articles of association of the Company, without changing the corporate
object of the Company, to reflect the proposed changes referred under
items 1, 2 and 3 above.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250314080117/en/
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Contacts
For further information please contact:
Christian Kern
Investor Relations
Tel: +44 7780 291 340
christian.kern@ses.com
Suzanne Ong
Communications
Tel. +352 710 725 500
suzanne.ong@ses.com
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