- Large shareholder urges Charge to take immediate action to address significant underperformance
- Believes changes announced by Charge on August 29, 2023 are insufficient for substantial value creation
NEW YORK, Sept. 11, 2023 /PRNewswire/ -- Arena Investors, LP (and its affiliates, collectively, "Arena"), an institutional asset manager that, together with investment funds managed by it, is one of the largest beneficial owners of Charge Enterprises, Inc. (NASDAQ:CRGE) ("Charge"), today sent a letter to the Board of Directors of Charge (the "Board") to reiterate the urgent need for Charge to take decisive action to significantly enhance value for its shareholders.
Responding to the press release published by Charge on August 29, 2023, announcing certain leadership changes and the development of a strategic plan, Arena believes these changes are insufficient and remains deeply concerned that Charge has neglected to address certain critical issues.
In its letter, Arena outlined the following necessary steps for Charge to take to improve its corporate management and operations in order to reverse the current trend of poor performance, including an approximately 78% decline in Charge's stock and a loss of approximately $346M in market capitalization in the past year:
- Elimination of a Staggered Board Structure: The entire Board should be subject to annual elections to ensure the Board is fully accountable to Charge's shareholders.
- Reinvigoration of the Board: The Board has demonstrated that it is unable to operate effectively and should be downsized to enable it to act in a nimble and decisive manner. In order to bring relevant expertise to the Board, a number of new directors should be elected with the appropriate skill set and a commitment to creating value for all shareholders.
- Changes in Management/Operations: The Board should conduct a thorough search for a permanent CEO with the help of appropriate advisors. In addition, the Board should immediately develop a talent acquisition strategy to hire new members of the corporate executive management team with strong experience in, among other areas, equity and debt financing.
- Engaging a Professional Interim Advisor: To manage this transition period successfully, the Board should immediately engage an experienced professional third-party interim advisor.
- Integration and Incentivization of Subsidiaries: Develop strategies to integrate Charge's services and products across the infrastructure operating subsidiaries while driving cost synergies across the organization, coupled with appropriate incentive mechanisms and performance metrics to reward those who actively seek and implement synergy-driven collaborations.
- Revisiting General and Administrative Costs: The Board should immediately initiate an independent review of Charge's corporate overhead and instill a culture of fiscal responsibility.
- Rationalize Cost of Capital: The Board and Corporate Management should focus on securing new long-term debt financing arrangements with the assistance of a qualified third-party debt capital markets placement agent.
As a long-term investor committed to realizing Charge's vast potential, Arena is confident that through stronger leadership, a more well-balanced board, a sound financial basis, and a clear strategy with efficient execution, Charge can drive much needed expansion in electric vehicle charging infrastructure while delivering substantial value to shareholders and benefits for customers, drivers and the environment.
The full text of the letter follows:
Board of Directors
Charge Enterprises, Inc.
125 Park Avenue, 25th Floor
New York, NY 10017
Dear Members of the Board of Directors,
As conveyed to you in our letter, dated February 28, 2023 (the "February 28th Letter"), and our letter, dated August 21, 2023 (the "August 21st Letter"), we are again writing to you on behalf of Arena Investors, LP ...