A group of investors including an arm of Swiss Re and the UK pension fund-backed water fund Aqua Resources has won a boardroom battle at New York-listed China Hydroelectric Corp.
The group has secured an agreement under which China Hydro’s Chief Executive John Kuhns will depart immediately with a $1.25m payoff. The deal also sees the dismissal of China Hydro’s litigation against the shareholders – and an agreement that the company will pay all the investors’ fees relating to the proxy contest and litigation.
The settlement also means that the shareholder group will get its candidates onto the company’s board. These include Moonkyung Kim, Jui Kian Lim, Amit Gupta and Yun Pun Wong.
They represent, respectively, Hong Kong-based environmental advisory firm Peony Investments, Aqua Resources fund manager Four Winds Capital Management, private equity firm NewQuest and Tsing Capital, the venture capital firm whose China Environment Fund is a China Hydro shareholder.Shadron Stastney, a partner in US hedge fund Vicis Capital, will also join the board as part of the settlement. A new chief executive will be selected by the board.
China Hydroelectric owns 26 operating hydropower projects in China with total installed capacity of 548MW.
Among the investor group was Aqua Resources, the London-listed water investment vehicle that is backed by the Merseyside Pension Fund and the West Midlands Pension Fund, and Swiss Re Financial Product Corp. The other investors were CPI Ballpark Investments, China Environment Fund III, L.P., Abrax, and IWU International Ltd.
“We are pleased that this matter has been resolved and look forward to working productively to address the issues facing the company,” stated NewQuest’s Gupta in a statement.
The company began legal proceedings against the “insurgent” shareholders last month, claiming they were “secretly planning” to take control of the company.
At one point, the investors met with proxy advisory firm Institutional Shareholder Services to present their case. Previous RI coverage