Hudbay Investor Seeks to Replace CEO and Most of its Board

JOHANNESBURG (Capital Markets in Africa) – Hudbay Minerals Inc.’s second-largest investor is seeking to oust the Toronto miner’s chief executive officer and replace most of its board.

Waterton Global Resource Management will nominate eight new directors at Hudbay’s upcoming annual meeting with a slate that includes former mining executive Peter Kukielski and financial services industry veteran Richard Nesbitt, according to a letter to shareholders Wednesday.

Waterton, which owns about 12 percent of Hudbay, will propose that Kukielski be named CEO of Hudbay and Nesbitt chairman. Kukielski was most recently CEO of Nevsun Resources Ltd. Nesbitt was previously the CEO of CIBC World Markets Inc., as well as the parent company of the Toronto Stock Exchange.

The two would replace Hudbay CEO Alan Hair and Chairman Alan Hibben, both of whom Waterton blames for the company’s underperformance. While shareholders vote to elect directors, appointing the CEO is a board decision.

“Hudbay suffers from a culture of entrenchment,” Isser Elishis, Waterton’s chief investment officer, said in the letter. “We believe that the company’s board must evolve in order to meaningfully hold management to account.”

A representative for Hudbay wasn’t immediately available for comment.

Toronto-based Waterton, which has never run a proxy fight, began agitating for changes at Hudbay last year, arguing it was mismanaged. The company’s shares have fallen more than 40 percent in the past year.

Hudbay has an “opportunity to recruit a CEO with a proven and successful track record,” Elishis said. “Mr. Kukielski not only has the operational experience to lead Hudbay, but, just as importantly, he has decades of experience in developing holistic business strategies for companies with multinational mining portfolios.”

Kuklieski resigned from Nevsun in December after the miner was acquired by Zijin Mining Group Co. Before that, he was CEO of Warburg Pincus-backed Anemka Resources Ltd. and CEO of Arcelormittal’s mining division.

Waterton supports the re-election of two of Hudbay’s incumbent directors: Carol Banducci and Sarah Kavanagh.

Its other nominees are: Mike Anglin, David Deisley, Emily Moore, Daniel Muniz Quintanilla, Ernesto Balarezo and David Smith.

Source: Bloomberg Business News