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Oct 26, 2017 1:50 PM ET

Daniel Russell and the Concerned Shareholders Issue Further Letter to Shareholders Urging Them to Reject Complacent Value Destruction and Choose Change for Synex

Legal Newswire iCrowdNewswire - Oct 26, 2017

VANCOUVER – Daniel Russell, a director and the single largest shareholder of Synex International Inc. (TSX:SXI) (“Synex” or the “Company“), along with other Concerned Shareholders today mailed a letter to Synex shareholders detailing the expertise of their nominees and questioning Synex’s self-serving tactics. The letter asserts that a vote for management is a vote for continued underperformance and corresponding undervaluation of Synex stock. Mr. Russell urges shareholders to vote only their BLUE proxy and thanks all shareholders for their continued support and input leading up to the meeting date.


Full text of the letter below:

Synex is at a Crossroads: Daniel Russell and the Concerned Shareholders Urge Shareholders to Reject Complacent Value Destruction, and Choose Change

Synex International Inc. shareholders are urged to vote their BLUE proxy today, in favour of five new and experienced nominees to replace the entrenched incumbent directors

It is time to put shareholders first and to let them decide for themselves the future of the Company. A vote for management is a vote for continued underperformance and corresponding undervaluation of Synex stock. Daniel Russell and the Concerned Shareholders continue to receive overwhelming support and now have the support of over 47% of the shares outstanding.  Don’t be distracted by claims of great things around the corner or new committees to oversee management. Instead, evaluate all management claims by asking yourself two simple questions:

  1. If they knew what to do, why haven’t they done it?
  2. If any of their claims were true, wouldn’t the stock be trading at a multiple and not a discount to its true value?

The current management wants you to continue to trust them with your investment and seek to fool you with vague indications of “near term potential”. Ask yourself why management believes a project that has been in development for 15 years with no certainty of securing an Electricity Purchase Agreement suddenly has great potential. Could it be that as long as projects remain in development the President can continue to capitalize expenses under accounting rules and prevent others from calling into question the asset value? Is he more concerned about the bright light of scrutiny or dealing with your investment? Let’s review the track record under management’s guidance:

  • your investment has performed abysmally,
  • your dividends have been suspended,
  • costs have bloated, and
  • despite 25 years at the helm and $33MM in assets, the President has only three power plant assets under the Company’s control. 

What possible reason would shareholders have to choose more of the same?

The Concerned Shareholders’ nominees have the passion and talent to turn Synex around. A vote with the Concerned Shareholders is a vote for a new approach focused on you, the shareholder, driven by the profitable and professional management of the Company.

Daniel Russell Has Assembled a World-Class Slate of Nominees

The Concerned Shareholders are putting forward a slate of five world-class nominees who bring diverse experience and skill sets. Daniel Russell believes a nominee’s skill set and experience should determine their suitability for Director roles, not who they know or where they live, and that a company with “International” in its name shouldn’t be hesitant to elect a superior director candidate should they live outside of British Columbia.

Daniel Russell and Tanya DeAngelis are already well known to shareholders. The three independent nominees are extremely well-qualified and successful in their own right; none are simply looking to add another job – they’re looking to lead the turnaround of Synex. 
All three independent nominees would be pleased to discuss their vision for the Company with shareholders who would like to have that conversation, and elaborate on why they’ve agreed to join Daniel Russell and the Concerned Shareholders’ slate.

Cecilia Tam 
Cecilia Tam has 24 years of experience working with and analyzing run of river and biomass generation plants around the globe. She has extensive financial expertise in this area, and a long history of developing deep understandings of the local complexities of these projects. This includes evaluating the impact of changing hydrology on cash flow for run of river projects – all key knowledge areas that will be a boon for the Synex of the future. 

Ms. Tam is an award-winning international utilities analyst and currently a Senior Energy Analyst at the International Energy Agency (“IEA”), where she has led the IEA’s research on clean energy finance, deployment and innovation. Ms. Tam holds a Masters of Industrial Economics from the Université Paris-Dauphine and a Bachelor (Honours) of Economics and Art History from Queen’s University.

Ms. Tam lives in Paris and frequently visits Vancouver, where her daughter is attending the University of British Columbia.

Richard McGivern 
Richard McGivern has worked in the British Columbia energy sector since moving to Vancouver in 2001, where he worked with BC Hydro on the Site C Project’s Construction Estimate Costs and Construction Methodology. Since then, he has worked on several run of river projects throughout BC, including numerous sites on Vancouver Island. He has wide-ranging experience in Estimating, Project and Construction Management, working with a number of public utilities (BC Hydro, Columbia Power Corp., North West Territories Power, Saskatchewan Power Corp.) as well as public companies and subsidiaries in the energy generation industry, including Brookfield Renewable Power, ATCO Power, and TransCanada Corp.

Mr. McGivern is the managing director of the Vancouver based Surespan Group, an independent power producer in BC, with existing capabilities in heavy structural erection, structural and civil design and civil construction. Surespan also has a long history working with First Nations Communities and contractors, and has strong relationships with local sub-trades. 
Mr. McGivern is qualified from the Southampton Institute of Technology in civil engineering and earned a certificate in business management from the Aston University School of Business. Mr. McGivern currently resides in Vancouver.

David Schincariol 
David Schincariol has a long track record of optimizing productivity and innovation at both public and private companies through the consulting firm Maremonte Group Ltd., where he is a Managing Partner. He has advised hundreds of companies on how best to encourage growth and efficiency with an aim to improving revenue growth and profitability – two areas of extreme importance to the turnaround of Synex.

Mr. Schincariol is also an Executive Advisor at the Business Development Bank of Canada where he advises executive officers across Canada on growth opportunities, strategic direction and action plan development.

Mr. Schincariol holds an MBA from the University of Toronto and a Bachelor of Science from the University of Toronto. Mr. Schincariol is also a designated Chartered Professional Accountant (CPA, CMA), a certified Project Management Professional (PMP) and a Certified Management Consultant (CMC).

Vancouver native, Mr. Schincariol currently resides in Toronto but is still heavily involved in the British Columbia business community through his work with Promerita, a Vancouver-based private-equity group, as well as his volunteer work with New Ventures BC.

The Concerned Shareholders’ slate has skills and experience that are clearly missing from the management slate, but equally important will bring focus and energy to what has become a stagnant board.  When management claims that the independent nominees are “not qualified”, please know that brand name enterprises, and indeed governments, know that they are more than qualified for the task at hand.

Management STILL Doesn’t Get It

In an October 16th Press Release management stated:
“The Special Committee believes there is significant near-term growth for Synex expected through the Newcastle and McKelvie Hydro Projects and that ceasing work in order to conserve cash resources would be short-sighted and could put the value of these development projects at risk.”

Perhaps the President  measures “near-term” against the 15 year history of the McKelvie project or perhaps he is concerned that he can no longer capitalize expenses if the projects are halted bringing greater scrutiny to his expense management. Management is either willfully misleading shareholders, or is displaying their fundamental misunderstanding of the current regulatory environment; they’re certainly right that the projects are at risk – BC Hydro has said as much! In an August 18 Program Update, BC Hydro repeatedly states that, with the uncertainty surrounding the regulatory framework, any project spending is done at the developer’s own risk. By misdirecting attention to the issuance of water licenses and land tenures, management is ignoring the fact that these projects could be completed with no Electricity Purchase Agreement awarded.

“BC Hydro is reminding applicants that spending during this existing Program uncertainty is at the applicant’s own risk.”
“BC Hydro feels that it is prudent at this time to remind SOP applicants that they are doing so at their own risk.”
“However, moving a project forward is at your own risk and is a commercial decision that developers will need to evaluate for their individual projects.”
“…having a queue position is not a guarantee of an EPA… and any money invested in a project is at developer’s risk.”

Focus on the Future

While management is pre-occupied with spreading fear through innuendo and “half truths”, the Concerned Shareholders are focusing on you, the shareholders.  Our energy is going into speaking with shareholders, fielding their views and laying the groundwork for much needed change to the board.  Each of our nominees believes that Synex is sitting on an enviable land package and has untapped potential that represents a significant opportunity for the future, and each brings something unique to the table to assist in harnessing that potential.  Only by a change in management approach and board oversight can we return Synex to its original investment thesis of being a profitable, clean energy producer and asset owner. We know from our many conversations that shareholders are fatigued with the constant under-performance and lack of accountability at the board.  We heard you loud and clear and every board nominee is committed to playing an active, personal role in the turnaround that is needed.

Your vote is extremely important, regardless of the number of shares you own. Shareholders should discard the WHITE Proxy and vote for change using only the BLUE Proxy.

Even if you have already voted using the Management Proxy, you have every right to change your vote. A later dated BLUEproxy will revoke any previous vote submitted.




Daniel Russell has retained Dentons Canada LLP as legal counsel, and Kingsdale Advisors as his strategic shareholder advisor and proxy solicitation agent.

This press release contains forward-looking statements. All statements that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” and similar expressions are generally intended to identify forward-looking statements. These statements are based on current expectations of the Concerned Shareholders and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove to be accurate. The Concerned Shareholders do not assume any obligation to update any forward-looking statements contained in this press release, except as required by applicable law.

Except where otherwise stated herein, the statements contained in this press release are not made by or on behalf of the management of the Company but are made by or on behalf of the Concerned Shareholders. 

A copy of this press release may be obtained on the Company’s SEDAR profile at www.sedar.com.

SOURCE Daniel Russell

For further information: Ian Robertson, Executive Vice President, Communication Strategy, Kingsdale Advisors, Direct: 416-867-2333, Cell: 647-621-2646, Email: [email protected]

Contact Information:

Ian Robertson, Executive Vice President, Communication Strategy, Kingsdale Advisors, Direct: 416-867-2333, Cell: 647-621-2646, Email: [email protected]

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