Bellamy’s, the troubled infant formula maker whose sales to China have stalled, today hit back at its biggest shareholder, Black Prince Private Foundation, which wants to replace the company’s board of directors.
The Black Prince, based in the secretive tax haven of Curacao, a Dutch territory in the Caribbean, has called a shareholders meeting to vote on replacing four members of the board with its own nominees.
In a letter to shareholders, the current board of Bellamy’s says the Black Prince is a foreign investor, hasn’t given a strategy or plan for the business and that three out of four of its proposed directors don’t appear to have listed company experience.
Jan Cameron, the founder of adventure clothing group Kathmandu, has been revealed as the driving force behind the Black Prince, which has 14.48% of the company’s shares. Cameron has said she has 2% of Bellamy’s in her own name.
The company last week pushed out its CEO, Laura McBain, cut its profit guidance again and saw its share price slide to less than a third of the value of its year high of $15.38. Today the shares are trading at $3.94, down another 2%.
Black Prince wants current non executive directors Patria Mann, Launa Inman, Michael Wadley and Charles Sitch to step down.
That would leave just the chairman, Rob Woolley.
In their place, Black Prince wants four new non-executive directors: Jan Cameron, Chan Wai-Chan (North Asia director for Dairy Farm), accountant Vaughan Webber and lawyer Rodd Peters. Peters is an authorised representative of the Black Prince.
However, the current board says there are questions as to the independence of Jan Cameron and her acting as a non executive director.
“These proposed directors do not have the equivalent listed company directorship experience of the existing directors,” Bellamy’s said in a statement to the ASX.
“Based on the information provided by Black Prince, three of them (being Jan Cameron, Rodd Peters and Chan Wai-Chan), do not appear to have any listed company directorship experience.
“Your board has concerns that the interests of shareholders, as a whole, may not be best served by having four Black Prince nominees join the board.”
Bellamy’s maintains that it’s still not clear how much of the company Jan Cameron really controls. She has said she personally has 2%.
“Bellamy’s has written to Jan Cameron directly to request that she urgently provide it with particulars regarding her total Bellamy’s holding,” the company statement said.
The company used provisions under the Corporations Act to force Black Prince to reveal its ownership structure.
The ultimate beneficiary of the Black Prince is the Elsie Cameron Foundation, set up as an environmental charity by Cameron and named after her mother.
The shareholder meeting to decide the board makeup will be held at the Park Hyatt in Melbourne on February 28.
Sales in China for the organic infant formula maker hit a speed bump when China changed regulations requiring registration.
This caused a wave of discounting which left Bellamy’s high end product sitting in warehouses unsold.
Facing overproduction and being left with stock it couldn’t sell, Bellamy’s renegotiated a supply agreement Fonterra, the world’s biggest dairy exporter, reducing production.
The company now expects full year revenue to be in the range of $220 million to $240 million, at best flat on 2015 and well below previous analyst expectations of about $330 million.