Methanex Comments on Shareholder Letter
March 18 2019 - 7:56PM
Methanex Corporation (“Methanex” or the “Company”) (TSX:MX)
(NASDAQ:MEOH) confirms that it has received a letter from M&G
Investment Management Limited and M&G (Lux) Investment Funds 1
(together, “M&G”) indicating that M&G is preparing to
nominate individuals to the Board of Directors (the “Board”) at the
Company’s upcoming meeting of shareholders on April 25, 2019.
The Company has not received any formal
nomination pursuant to the Advance Notice provision in its by-laws.
Methanex advises shareholders no action is required with respect to
M&G’s letter.
As part of our active and ongoing communication
with all shareholders, Methanex’s Board and management appreciate
constructive input from shareholders and take all shareholder views
seriously. We are committed to acting in the best interest of all
shareholders and give due consideration to constructive
recommendations for strategies or actions that have the potential
to create value.
We have consistently taken a balanced approach
to capital allocation by growing our business to enhance our
leadership position in the methanol industry and delivering on our
commitment to return excess cash to shareholders through our
dividend and share repurchases.
We have a well-defined strategic plan being
facilitated by a management team with a track record of
success. We continue to enhance our leadership position as
the major producer and supplier in the global methanol industry by
profitably growing our production capacity in line with market
growth. The investments we have made over the last few years to
increase our production capability have strengthened our asset base
and significantly improved our earnings capabilities and cash
generation potential across a wide range of methanol
prices.
GEISMAR 3 OPPORTUNITYAs
previously disclosed, we currently have a unique opportunity to
consider a third plant in Geismar, Louisiana which has significant
advantages over other projects being contemplated or under
construction in the US Gulf Coast based on its location next to our
two existing Geismar facilities and the potential to integrate the
production process with these facilities. These features of a
potential Geismar 3 facility significantly reduce capital and
operating costs compared to a stand-alone project.
We have additional work to complete leading up
to a final investment decision in mid-2019 and, based on our
progress to date, we believe that this project offers a tremendous
opportunity to create significant value for our shareholders.
With regards to the participation of a strategic partner, although
this has been our preference, the Board believes it is not in the
best interest of Methanex to foreclose the possibility of
proceeding with the Geismar 3 project without a partner. We will
continue to evaluate the progress of the Geismar 3 project,
including the optimal financing structure and plans to mitigate
risks, but will not be in a position to fully evaluate the project
and make a final investment decision until the Company has
completed its assessment of the project risks (including balance
sheet risk), prepared plans to mitigate such risks and the
front-end engineering work has been completed. Until that
assessment is complete, the Board does not believe it is
appropriate to limit the Company’s flexibility by committing to one
structure rather than another.
ONGOING COMMITMENT TO RETURNING EXCESS
CASH TO SHAREHOLDERSWe have a long track record of
disciplined capital allocation and returning excess cash to
shareholders, while maintaining a prudent balance sheet and
liquidity given the cyclical nature of our company. Over the
last five years, we have reduced the Company’s shares outstanding
by 20% and have grown our dividend every year except during the
2009-2010 financial crisis and during 2016, when we maintained our
dividend despite very low methanol prices. In 2018, we returned
over $450 million to shareholders through our regular dividend and
10% share repurchase program. Over the last five years we have
returned $1.6 billion to shareholders through our dividend and
share buybacks. In addition, we recently announced that our
Board approved a new 5% Normal Course Issuer Bid commencing on
March 18, 2019.
We remain focused on continuing to deliver on
our strategic plan and building long-term value for all
shareholders. We believe we are well positioned to meet our
financial commitments, pursue our growth opportunities and deliver
on our commitment to return excess cash to shareholders through
dividends and share repurchases.
ABOUT METHANEX Methanex is a
Vancouver-based, publicly traded company and is the world's largest
producer and supplier of methanol to major international markets.
Methanex shares are listed for trading on the Toronto Stock
Exchange in Canada under the trading symbol "MX" and on the NASDAQ
Global Select Market in the United States under the trading symbol
"MEOH". Methanex can be visited online at
www.methanex.com.
FORWARD-LOOKING INFORMATION
WARNINGThis news release contains certain forward-looking
statements with respect to us and our industry. These statements
relate to future events or our future performance. All statements
other than statements of historical fact are forward-looking
statements. Statements that include the words "expect" and
"continue" or other comparable terminology and similar statements
of a future or forward-looking nature identify forward-looking
statements. More particularly and without limitation, any
statements regarding the following are forward-looking
statements:
- Methanex’s expected future
financial strength and cash generation capability, and
- Methanex's ability to continue to
return excess cash to shareholders.
We believe that we have a reasonable basis for
making such forward-looking statements. The forward-looking
statements in this document are based on our experience, our
perception of trends, current conditions and expected future
developments as well as other factors. Certain material factors or
assumptions were applied in drawing the conclusions or making the
forecasts or projections that are included in these forward-looking
statements, including, without limitation, future expectations and
assumptions concerning the following:
- the supply of, demand for, and
price of methanol, methanol derivatives, natural gas, coal, oil and
oil derivatives,
- our ability to procure natural gas
feedstock on commercially acceptable terms,
- receipt or issuance of governmental
and regulatory consents or approvals, including without limitation,
environmental permits required in order to operate a potential
Geismar 3 plant,
- operating rates of our
facilities,
- operating costs including natural
gas feedstock and logistics costs, capital costs, tax rates, cash
flows, foreign exchange rates and interest rates,
- timing of completion and cost of
execution of a potential Geismar 3 plant, and
- global and regional economic
activity (including industrial production levels).
However, forward-looking statements, by their
nature, involve risks and uncertainties that could cause actual
results to differ materially from those contemplated by the
forward-looking statements. The risks and uncertainties primarily
include those attendant with producing and marketing methanol and
successfully carrying out major capital expenditure projects in
various jurisdictions, including without limitation:
- conditions in the methanol and
other industries including fluctuations in the supply, demand for
and price of methanol and its derivatives, including demand for
methanol for energy uses,
- the price of natural gas, coal, oil
and oil derivatives,
- our ability to obtain natural gas
feedstock on commercially acceptable terms to underpin current
operations and future growth opportunities,
- the ability to successfully carry
out corporate initiatives and strategies,
- actions of competitors, suppliers
and financial institutions,
- world-wide economic conditions,
and
- other risks described in our 2018
Annual Management's Discussion and Analysis and our Fourth Quarter
2018 Management's Discussion and Analysis.
Having in mind these and other factors,
investors and other readers are cautioned not to place undue
reliance on forward-looking statements. They are not a substitute
for the exercise of one's own due diligence and judgment. The
outcomes anticipated in forward-looking statements may not occur
and we do not undertake to update forward-looking statements except
as required by applicable securities laws.
For further information,
contact:
Investors: Kim CampbellManager,
Investor RelationsMethanex Corporation604 661-2600 or Toll Free: 1
800 661 8851www.methanex.com
Media: Ian RobertsonExecutive Vice President,
Communication StrategyKingsdale AdvisorsDirect: 416-867-2333Cell:
647-621-2646Email: irobertson@kingsdaleadvisors.com
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