The current Board of Directors reiterates its firm intention to maximize shareholder value with the process currently underway
DRUMMONDVILLE, QC, May 17, 2012 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or the "Corporation") (TSX: CVT) reminds its shareholders that it has filed, on May 8, 2012, a management proxy circular (the "Circular") which, among others, proposes to elect the following nominees for directorship of the Corporation: Jacques Joly, André Laramée, Robert Beaudoin, Serge Chiasson, André Lepage, Luc Reny and Guy Aubert. As a member of the Human Resources and Compensation Committee, Mr. Aubert has approved the nominees and has recommended the adoption of the Circular by the Board of Directors. Last May 14, Mr. Aubert (the "Dissenting Shareholder") has filed a circular proposing six new nominees as well as himself.
The Corporation wishes to advise its shareholders that it is in their best interest as well as in the best interest of the Corporation to vote for the current slate of directors proposed by the Corporation's management in the Circular. The Corporation believes that a change in the Board of Directors might have an immediate negative impact on CVTech and its shareholders. Moreover, certain statements by the Dissenting Shareholder are misleading and detrimental to the Corporation.
First, the Dissenting Shareholder proposes a plan whose main items are already being implemented, notably the sale of the activities of the CVT Systems and Related Products Segment and the maximization of shareholder value. These items are part and parcel of CVTech's current strategic plan.
By way of proof, last May 10, the Corporation announced that its Board of Directors had begun examining strategic and financial alternatives with the objective of maximizing shareholder value. An independent committee made up of CVTech's independent directors has also been formed to review and consider such alternatives. The Corporation confirms that review of strategic alternatives is proceeding as planned. However, a change in the Board of Directors could negatively impact the process. As for the Dissenting Shareholder's allegation that the Corporation does not provide any information on how long this process will take or what it will accomplish, the Corporation is of the view that it is in the best interests of all concerned parties to limit statements about the process so as not to interfere with its outcome.
In addition, the Dissenting Shareholder denounces certain compensation and operating expenditures as excessive and criticizes poor performance in terms of earnings. As a director of the Corporation and member of the Human Resources and Compensation Committee, the Dissenting Shareholder has always approved the sums allocated to executive officers, sums he now deems excessive. As a director of the Corporation, he has always supported the investments and expenditures he now sees fit to denounce. Moreover, until May 31, 2010, the Dissenting Shareholder held the position of Vice-President, Energy Sector of CVTech, which accounted for approximately 90% of CVTech products. He is therefore responsible in several respects for the corporate performance he now qualifies as poor, an opinion that is not shared by the other members of the Board of Directors of the Corporation.
The Corporation is of the firm opinion that the Dissenting Shareholder has nothing of note to propose to maximize shareholder value because he is suggesting measures that the current Board of Directors has already proactively undertaken. As for the misleading and detrimental statements by the Dissenting Shareholder, the Corporation, assisted by its legal counsel, is currently in the process of assessing the best way to set the record straight.
Consequently, the Corporation reiterates its recommendation to vote using the WHITE form only for the following directors: Jacques Joly, André Laramée, Robert Beaudoin, Serge Chiasson, André Lepage, Luc Reny and Guy Aubert.
OVERVIEW OF THE CORPORATION
CVTech is a management company operating in two sectors. Through Thirau ltée and its subsidiaries, Riggs Distler Inc. and Thirau LLC, the Corporation provides services to the electric power industry for the maintenance of transmission and distribution lines, primarily in Quebec, Ontario and the eastern United States. Another Thirau ltée subsidiary, J.J.L. Déboisement inc., specializes in control of vegetation surrounding power lines and in clearing rights of way. Thirau LLC's wholly owned subsidiary Riggs Distler & Company, Inc. is a leading provider of maintenance and construction services to the utility and heavy industrial markets. In the CVT Systems and Related Products Segment, the Corporation, through CVTech-IBC Inc., designs, manufactures and sells continuously variable power transmission systems, or CVT systems. CVTech-AAB Inc. specializes in rebuilding crankshafts and cylinders and in distributing engine parts.
This document may contain forward-looking statements that reflect management's current expectations regarding future events. Forward-looking statements are based on a number of factors and include risks and uncertainties. Actual results may differ from forecast results. Management has no obligation beyond what is required under the law to update or revise forward-looking statements pursuant to new information or future events.
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Source: CVTech Groupe Inc.