Yesterday we reported that three non-executive directors at the aviation and travel services company FL Group had resigned on Thursday, and that the 2nd largest shareholder, Saxbygg, had sold its shares, some 26 per cent of FL Group’s equity, to the Chairman of FL Group and investors connected to Baugur.
(See Iceland Review, Daily News, July 1, “Changes at FL Group?“)
Daily Morgunblaðið, which broke the story, followed up yesterday on its website reporting that investment companies Saxbygg and Mannvirki had sold their 26.5 per cent and 1 per cent stakes, respectively, to Landsbanki.
According to an announcement on the website of Landsbanki, Landsbanki, in turn, has entered into forward sale agreements with Katla Holding, owned by Kevin Stanford, Sigurður Bollason and Magnús Ármann, for 17.68 per cent of FL Group; investment company Oddaflug, owned by FL Group Chairman Hannes Smárason, for 5 per cent, bringing his share to 35.5 per cent; and Baugur Group for 2.46 per cent, pushing Baugur’s share to 10.4 per cent.
In total, the three largest shareholders in FL Group, Oddaflug, Katla and Baugur, now own 63.6 per cent of the company.
Both Iceland State Radio, RÚV, and Morgunblaðið reported that in addition to the three directors that had resigned, the remaining three non-executive directors would be stepping down at an extraordinary shareholders meeting to be held on July 9. They are: Gylfi Héðinsson of construction company Bygg; Jon Jonsson of investment company Saxhóll; and Pálmi Kristinsson of investment company Mannvirki.
In a statement filed on the Icelandic Stock Exchange yesterday, FL Group welcomed “new shareholders that will participate in the company’s further development and expansion abroad.” The sole remaining director, Executive Chairman Hannes Smárason, was quoted saying that the group of investors, and the board, which had steered the company over the past year had been “well-coordinated”.
“We have achieved great results working together as a team,” he said, “the share price has risen 93.4 per cent in a year,” and “certain shareholders are realizing gains and turning to other projects, a new group is joining the company to participate in its further development and growth.”
TV-station Stöð 2, and the affiliated radio channel Bylgjan, reported, however, that the three directors that resigned Thursday had done so after serious disagreement with the Chairman on how to run the company. Stöð 2 said the directors had been concerned with “reckless management practices”, and added that FL Group had made several substantial investments lately. Daily Fréttablaðið adds that the three directors were frustrated by the Chairman’s “lack of consultation” with other members of the board. Fréttablaðið specifically mentions investment decision that the Chairman had made on his own.
Stöð 2 quoted Hannes Smárason saying that he did not agree that there had been a difference of views within the board of FL Group. The other directors had had “a full slate” and therefore resigned. There were many exciting projects coming up at FL Group. Among other things the company had been in discussions with Easy Jet concerning further potential collaboration although no agreements had so far been reached.
Stöð 2 also noted that one of the non-executive directors who resigned, Vice-Chairman Hreggviður Jónsson, had initially joined the board through his relationship to the Chairman, Hannes Smárason. Prior to returning to Iceland, the two both worked at the international consulting company McKinsey.
“I have big dreams for the company, I work day and night to realize them, and it could well be that some people find it uncomfortable being relegated to the back seat,” said Hannes Smárason to Fréttablaðið. He added that serving on the board of such a company required “a lot of time and energy” and said it was understandable if people questioned their ability to serve as directors for a such a demanding company.
When Morgunblaðið asked FL Group CEO, Ragnhildur Geirsdóttir, if the changes at FL Group would have any impact on her responsibilities or those of other managers at the company, she replied “not for the moment.”