D1 Oils has become the latest battleground for activist investor Brian Myerson, a veteran of wars at Liberty, Scholl and Signet, who has unveiled plans to turn the jatropha group into an African ethanol company
Mr Myerson, D1 Oil's chairman since December 2008, has proposed buying the oilseeds group to use as a vehicle for floating a cane sugar ethanol venture, Principle Energy, which he is setting up in central Mozambique.
The takeover would see D1's jatropha businesses sold-off by February, and its resources, including £10.3m in free cash, plus $70m-80m in new shares used to develop the ethanol business.
However, the plans by D1's biggest shareholder – Mr Myerson's Principle Capital empire has a 27.6% stake - are being resisted by its other directors, who have proposed yet another strategic shake-up.
Alternative plan
The remaining five directors said they believed D1 Oils had "good long term growth potential" as a champion of jatropha, whose seeds can be refined into biofuels, and which, unlike other oilseed crops, can be grown on poor quality land.
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D1's momentous year
Nov 25: reveals plans by Principle Energy for reverse takeover, and alternative India-focused plans to lift jatropha output
Nov 12: reveals "a number" of approaches
Sep 8: unveils post-joint venture structure
Jul 17: buys BP out of joint venture
Jun 4: says fund-raising "uncertain"
Feb 4: says seeking new investors in D1-BP Fuel crops joint venture |
"The company is well-positioned to deliver enhanced shareholder value over the long term," they added.
Under revised plans, the group would focus "strongly" on India, where through a network of jatropha plantations currently at 177,500 hectares it aimed to raise oil yields from 2,000 tonnes next year to 31,000 tonnes by 2012.
By 2014, D1 would generate £40m a year in sales of jatropha oil, a source of biodiesel, and byproducts.
D1's technology division is working on converting into a livestock feed the meal left over from processing the oilseed, raising jatropha's revenue potential by $1,400 a hectare.
Fund-raising delayed
The directors added that their fresh plans would push back by a year, to late 2011, a fifth fund-raising since and including its flotation five years ago.
"The new business plan will materially reduce European overheads," the group said, adding that it had cut £4.8m in costs by absorbing a joint venture with BP, after the oil giant quit, and had £3.5m pending from litigation.
The plans are the latest in a series of strategic changes by the group, which has ditched plans to produce biodiesel from bought-in vegetable oils, selling its Middlesborough refinery in July, and for a jatropha plantation spree.
Veteran campaigner
Mr Myerson became one of the most high profile activist investors in the UK through waging sometimes campaigns to shake-up companies viewed as underperforming.
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D1's biggest shareholders
1: Principle Capital Advisors, 27.6%
2: BlackRock Inv Management, 13.4%
3: Gartmore Inv Management, 11.8%
4: Lansdowne Partners, 9.7%
5: Majedie Asset Management, 3.2%
Source: Reuters |
These include Photo-Me International, where he forced the departure of the chairman and chief executive, and Blacks Leisure, where he helped persuade the board to hire a new chief executive.
Earlier this year, he lost a high-profile campaign to reduce his divorce settlement because of the market downturn.
D1 shares closed down 4.1% higher at 7.0p in London.
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