Terran Orbital’s [LLAP] independent board members last week rejected proposals by a minority shareholder group seeking the ouster of the company’s chairman and CEO and a potential sale of the satellite manufacturer.
Instead, the six directors said “the Company’s current strategy remains the best course for maximizing long-term shareholder value.” They also said in an October 19 letter to shareholders
that Marc Bell, Terran Orbital’s chairman and CEO, and the “entire management team” have their “continued and unqualified support.”
The independent directors—the letter was not signed by Bell or the board’s vice chairman, Daniel Staton—responded to an October 11 letter from Sophis Investments, Roark’s Drift, and the co-founders of a satellite company acquired by Terran Orbital 10 years ago. The frustrated investors own a combined 8.4 percent of Terran Orbital’s stock.
In addition to removing Bell, the concerned shareholders want governance changes that include separating the chairman and CEO roles, new independent directors, a refocus on business development efforts toward government work that is funded, and a strategic review that includes a potential sale of Terran Orbital.
The independent directors in their October 19 letter cited several “strategic successes” under current management to include the delivery of satellite buses for the Space Development Agency’s Tranche 0 Transport Layer for mesh communications, a new family of standard satellite bus systems, and a commitment to responsive space initiatives with an aim to deliver standard satellite buses and complete satellite systems at a rapid pace.
The directors also said that they constantly review their strategic options for the company that that the recommendations from the concerned shareholders are not new.
Following the message to shareholders, the dissident group released a statement that they are troubled the board “seemingly rejected out of hand” their proposals. They also said that while the board says it welcomes input from shareholders, the board has “ignored multiple requests to meet with our group,” which combined makes up one of Terran’s “largest shareholders.”
“We believe the Board’s actions reflect its lack of urgency in addressing the issues facing the company in addition to the deep-rooted corporate governance problems plaguing Terran, which has continued to see its stock value deteriorate,” the concerned shareholders said.
Terran’s independent directors are Stratton Sclavos, James LaChance, Richard Newton, Douglas Raaberg, Tobi Petrocelli, and Thomas Manion.