HOUSTON (ICIS)--A group of shareholders of diversified US-based wood chip and fertilizer firm Rentech on Thursday published a letter criticising the company’s strategy and urging its board not to authorise larger new projects or acquisitions for the time being.
The group, led by Engaged Capital and Lone Star Value Management, holds about 4.6% of Rentech’s shares. It previously nominated four candidates to Rentech’s board of director but the board was unwilling to discuss this measure, the group said in its open letter to the board on Thursday.
The shareholder group said that Rentech’s leadership team had a “history of failed strategies, botched acquisitions, wasteful spending, and poor execution is both troublesome and apparently negligent.”
For the period up to Rentech’s 2014 annual meeting, the group urged the board not to approve new projects requiring capital investment of more than $10m, and not to pursue additional acquisitions.
However, the group also said that it saw a “significant value creation opportunity that we believe exists at Rentech”, and it requested an exemption under the company’s shareholder rights plan to enable it to acquire additional shares.
“We believe no good reason exists for the board to deny our request other than to further entrench the board and management,” it added.
Rentech was not immediately available for comment. However, the company said last month that it would “carefully evaluate” the group’s nominees and make a recommendation to shareholders “in due course.”
Additional reporting by Mark Milam