Harbinger looks to replace board of Oglebay Norton, pushes company to review strategic alternatives

By Jennifer Chiou

New York, July 3 - The board of directors of Oglebay Norton Co. received a letter from Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, LP stating their intention to replace Oglebay's board and encourage a review of the company's strategic alternatives, according to a news release.

Harbinger pointed out that it previously requested representation on the Oglebay board equal to that which it could secure through cumulative voting at a meeting, but the request was declined.

In the letter, Harbinger said that it is one of Oglebay's largest shareholders and has a keen interest in seeing the company "take actions that are in the best interests of its shareholders."

Harbinger said it believes that Oglebay is pursing acquisitions - a series of leveraged acquisitions - that are not in the best interests of shareholders.

The letter noted that Oglebay cannot afford large acquisitions in addition to the aggressive capital expenditures needed to reverse years of underspending while the company was in Chapter 11.

Harbinger added that it believes that the company would need to invest about $30 million per year for the next several years to build a competitive business.

In its letter, Harbinger said that Oglebay should leverage its strategic resources rather than its balance sheet by partnering with a larger company with complementary assets and greater financial resources.

Harbinger added that it intends to nominate directors for election at this year's annual meeting who, once elected, will explore all available strategic alternatives to maximize shareholder value.

Harbinger Capital Partners Master Fund is focused on restructurings, liquidations, event-driven situations, turnarounds and capital structure arbitrage. Harbinger Capital Partners Special Situations Fund is focused on medium- to long-term, control-oriented and frequently less liquid distressed investments.

Oglebay Norton is a Cleveland-based sand and mica mining company.

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