9 questions asked at 2023 Ventia Services AGM
May 27, 2023
Here is the text of the 9 written questions asked online during the 2023 Ventia Services virtual AGM held on May 23, along with a summary of the answers and video grabs of the exchange via this high quality webcast and Twitter. Chair David Moffatt even said (watch video) he enjoyed the diverse range of questions at the end of the meeting.
1. How did we go about negotiating an escrow arrangement with CIMIC and Apollo such that they agreed not to sell any more shares before the half year results are released in August. After the latest major sell-down two weeks ago, are we expecting these two cornerstone shareholders to keep selling down together. Are they obliged to do that and how much notice did we get on the recent sell-down?
Answer: The escrow arrangements were negotiated between the investment banks and the selling shareholders and Ventia found out about it at the same time as everyone else. Watch video via Twitter.
2. Could Kevin please comment on the history of his relationship with Apollo and whether the private equity firm is happy with its investment in Ventia, even though it recently sold down to less than 15%. How small does Kevin believe Apollo's shareholding would need to become before his position as a nominee director would lapse. Also Kevin, why is Apollo continuing to sell and should we expect another sale before the end of the year?
Answer: the Apollo board rep Kevin was away on a personal matter but the chair said they like him very much but the nomination right falls away when the shareholding drops below 10%. CIMIC quit the board last year due to operating conflicts of interest. Watch video via Twitter.
3. The Federal Government has introduced a range of laws during its first 12 months which have tilted the power balance in favour of unions and against employers. Which of these changes have had the biggest impact on our business, how unionised is our workforce, what do the current labour hire changes mean for us and how strict are Labor state and Federal governments in Australia in terms of hiring contractors with unionised workforces?
Answer: A lengthy answer from the chair which generally played it diplomatically but did warn at the end against an ideological approach to the same work same pay legislation proposed in Australia. Watch videos via Twitter - part one and part two.
4. Thank you for disclosing the proxy position to the ASX along with the formal addresses. The only notable protest vote was 9% against this proposed LTI grant. Which of the proxy advisers recommended against, what was the issue and did Apollo and CIMIC vote in favour of this item?
Answer: Another good answer from the chair explaining that ISS recommended against with the two issues being the 2 year performance period on the LTI and the lack of transparency on the hurdles. Watch video via Twitter.
5. The Ventia board doesn't include any directors who are prominent long term members of the ASX200 directors club. Well done for looking further afield than the usual suspects and who ultimately was responsible for putting the board together for the float. Is the head hunting firm that did this work still involved and does the chair agree that the latest sell down by CIMIC and Apollo to a combined stake of less than 30% means that Ventia is now largely an independently owned and governed company.
Answer: Chair talked up the independent nature of the board saying that all board committees were independently chaired since the 2021-22 float. Watch video via Twitter.
6. It is always a bit embarrassing for a vendor when an IPO delivers a share price which soars way about what retail and institutional investors agreed to pay. Ventia floated at $1.70 in November 2021 and the stock opened at $2.69 this morning. Does anyone on the board know the average entry price for CIMIC and Apollo and the average sale price so far? Does the chair agree that given the poor record of IPOs offered by private equity firms, our record is a rare diversion from that unfortunate history involving the likes of Myer, Latitude, Pepper Money and Dick Smith.
Answer: a diplomatic response from the chair which acknowledged the relatively low float price but said CIMIC and Apollo have been able to sell subsequently at better prices. Indeed they have. Watch video via Twitter.
7. Well done for setting a target of 6% Indigenous employment. What are we currently at and could the CEO comment on what government programs are available to expedite progress on this front?
Answer: the CEO said the Indigenous workforce is currently at 4.8% and they continue to work hard to grow this. Watch video via Twitter.
8. The Victorian Government is releasing its budget today and there's a lot of talk about infrastructure spending being wound down. What are the biggest Victorian government projects we are currently working on and please provide more information about our North East Link work. If the proposed widening of the Eastern Freeway was abandoned, would that impact us or is our work concentrated on building Australia's longest tunnel with the Spark consortium.
Answer: Chair said the main contract was operating the tunnel after it opened and they also have the maintenance contract for Eastlink so a change to the Eastern Freeway expansion plans wouldn't directly impact them. Watch video via Twitter.
9. Could the new CEO comment on how welcoming Australians have been given that he is English and the temperature is rising on colonisation and justice for first nations Australians. Does his background come up in dealings with Indigenous workers and does the CEO believe Australia should become a republic? Is it in these LTI performance hurdles that Ventia further diversity its workforce and get behind projects such as supporting the Voice proposal.
Answer: The English CEO said he has been warmly welcomed and enjoys talking to Ventia's first nations employees. Watch video of CEO via Twitter plus these separate comments by the chair on The Voice.
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