Kistefos fires back at Trico Marine over Jones Act eligibility

By Lisa Kerner

Charlotte, N.C., June 1 - The back and forth public commentary between Trico Marine Services, Inc. and dissident shareholder Kistefos AS continued as Kistefos sought to set the record straight regarding its proposals, the U.S. Maritime Administration (MarAd) and the Jones Act.

Kistefos, in a Monday letter to Trico shareholders, said MarAd has confirmed that Kistefos' proposals designed to improve management accountability and corporate governance will not place Trico's Jones Act eligibility at risk.

The Jones Act limits the participation of non-U.S. citizens on the boards of companies that wish to engage in the "coastwise trade" to a "minority of a quorum" of the board, the Kistefos letter said.

Trico is using the Jones Act "as a smokescreen to avoid accountability for the company's poor operational and financial performance," Kistefos said.

According to Kistefos, Trico's latest communication with shareholders "intentionally misrepresents MarAd's letter."

Trico's statement

On Friday, Trico issued a statement that MarAd identified a possible problem with Kistefos' proposals regarding Trico's Jones Act eligibility.

According to MarAd, if Kistefos' proposal to increase the quorum requirement to seven is adopted, Kistefos nominees Christen Korsvold and Age Sveaas are elected and the current non-U.S. citizen, Per Staehr, is removed without being replaced by a Trico nominee, then Kistefos' non-U.S. citizen nominees would constitute two of eight directors.

According to Trico, a Friday letter from MarAd said Kistefos would then be able to exercise negative control over the company.

As previously reported in Prospect News, Trico wants shareholders to vote on the white proxy card for its nominees - chief executive officer Joseph S. Compofelice and Ben A. Guill - and against the Kistefos proposals, other than the proposal to eliminate the classification of Trico's board.

Kistefos is seeking the election of its CEO, Korsvold, and Sveaas at Trico's annual meeting on June 10.

In a Wednesday letter to Trico shareholders, Kistefos said Trico's board "saw fit to award itself an additional 60,000 stock options at an exercise price of $3.57, approximately 40% below the price" where the shares traded May 5.

Trico's board also awarded Compofelice a base pay increase of $100,000 despite recording an operating loss of $128 million in 2008, according to Kistefos.

Houston-based Trico provides marine support services to the oil and gas industry.

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