Newspaper article St Louis Post-Dispatch (MO)

Ex-Solutia CEO Seeks to Oust Zoltek Board

Newspaper article St Louis Post-Dispatch (MO)

Ex-Solutia CEO Seeks to Oust Zoltek Board

Article excerpt

After a failed bid to buy Zoltek Cos., an investment group led by Jeffry Quinn now is seeking control by ousting the companys board of directors, arguing a new board is needed to re-energize the carbon fiber makers financial performance.

Quinn, a former Solutia CEO and president who lives in the St. Louis area, is leading the Quinpario group, a band of shareholders that owns 10 percent of Bridgeton-based Zolteks outstanding common stock.

The group is the companys second-largest shareholder. Zolteks founder, chairman and CEO Zsolt Rumy owns an 18 percent stake in the company.

The news sent Zolteks share price surging $1.27, or 14 percent, to $10.52 by Tuesdays close.

After the stock market had closed, Zoltek said it did not plan to call a special meeting of shareholders. However, the company also said it was willing to engage the shareholders if a bona fide proposal was presented.

Quinn, who left Town and Country-based-based Solutia after its sale to Eastman Chemical last year, has requested a special meeting of Zolteks shareholders to remove all current board members and elect a slate of candidates selected by Quinpario.

The candidates that Quinpario are backing include Quinn, Edgar G. Hotard, Walter Thomas Jagodinski, James P. Heffernan, and John Rutledge.

Efforts to overhaul the board follow an offer by the Quinpario group in November to buy all of Zolteks outstanding shares at a price per share in the mid-teens.

Zoltek declined to engage in sale talks, Quinn said. The company also declined to engage in talks for Quinpario to make an equity investment, that, combined with a new credit facility, would have resulted in a sizable cash dividend for Zoltek shareholders, Quinn said in a telephone interview Tuesday.

Were a group of proven corporate leaders with a long record of experience, Quinn said of Quinpario. The groups St. Louis investors, which include former senior executives at Solutia, had pooled their funds to attempt a turnaround at Zoltek, he said.

Zolteks stock has been flat for five years, Quinn said. We believe new market opportunities and geographic expansion will lead to financial results that will create shareholder value. …

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