An investment group that owns a nearly 10% stake of Ryerson Inc., a metals distributor and processor, said Tuesday it wants to replace the majority of the company's existing board due to a lack of experience and poor performance.
Harbinger Capital Partners Master Fund I Ltd. and Harbinger Capital Partners Special Situations Fund LP, which together own a 9.7% stake in Ryerson, detailed its intention to nominate seven independent directors in a written notice to the company's board that will be made public in a filing with the Securities and Exchange Commission.
Ryerson's current board lacks the experience in the metals service center industry "and has provided insufficient oversight of the company's management team," according to a Harbinger release that said Ryerson has been underperforming for 10 years compared with its peers.
"This company has consistently underperformed and there is a need for a significant change at the board level," Larry Clark, managing director of Harbinger Capital Partners, said in a release.
A representative from Ryerson did not immediately return a call for comment Tuesday afternoon.
Harbinger agrees with Ryerson's long-term strategy to simultaneously improve cost structure and productivity, and expand its customer base, but "we believe the company's performance over time demonstrates that the current management team has failed to execute on this strategy and requires better counsel - and we are taking this important step to provide it," Clark said.
Harbinger, which manages $5 billion in capital, also notified Ryerson that it is filing stockholder proposals intended to deter the current board from creating obstacles to the election of the Harbinger nominees.
The company's current board includes executives from American Express, Procter & Gamble, DeVry Inc., and other firms, according to the Ryerson Web site.