Investment house Appaloosa LP, which holds funds worth more than 7 per cent of satellite operator SES, has been denied its suggestions to modernise its boardroom, shareholder structure and dividend policy.

SES, in response to Appaloosa, said: “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 [proposals] by Appaloosa LP, 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 [them].”

However, SES has made two new appointments to its Board, both Americans: Ellen Lord is the former Under Secretary of Defense for Acquisition and Sustainment of the US Department of Defense. John Shaw is a former Deputy Commander of the US Space Force and first Commander of the USSF Space Operations Command and Combined Forces Space Component Command.

SES also says that its overall Board size will be reduced to 9 members by 2026. Were SES to follow Appaloosa’s suggestion there would be chaos and this would be “in contrast to the Company’s own careful approach to identifying highly skilled new Board members.”

SES explained why it cannot alter the company’s ‘B Shareholder’ structure, noting: “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.”

SES added: “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.”

Appaloosa, in its response to the decision, said: “The satellite industry is evolving rapidly and, as the SES Board’s announcement makes clear, even glacial change at SES requires strong shareholder advocacy. The initial steps the SES Board is taking to modernise its structure are long-overdue and only came following shareholder pressure. However, much more can, and must, be done – with a greater sense of urgency than is evident from the Board’s incrementalism.

“Specifically, adding a director with capital markets experience should be a priority as we believe such an appointment could prompt SES to finally begin addressing its underperforming capital investment practices and return value to shareholders. Likewise, the remaining board, capital structure and governance measures outlined in our proposed Resolutions are no less urgent. Shareholders should be disappointed that the Board did not even allow a vote on our capital structure and governance proposals,” it continued.

“Appaloosa urges shareholders to vote in favor of Resolution 21 (which returns excess cash flow to shareholders) and will continue to advocate on behalf of all shareholders so that SES can be positioned for long-term success in today’s competitive environment,” Appaloosa said.

SES’s AGM is scheduled for April 3rd.

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Tags: Appaloosa, SES