Date posted online: Wednesday, May 09, 2007
NiSource CEO pledges news soon on restructuring
Union official doubts NIPSCO sale coming
WASHINGTON, D.C. | NiSource Inc. CEO Robert Skaggs Jr. told shareholders the company is approaching completion of an almost two-year strategic review, but gave few other clues to its direction at an annual meeting Tuesday.
That review has "considered a broad spectrum of alternatives for unlocking the underlying value of NiSource's asset base and positioning the company on a solid footing for future growth," Skaggs told shareholders.
The CEO promised an update on the review by the end of May. The company has said that update will deal with the "results" of the review.But the long length of the review, and a lack of any news since reports about the possible sale of NiSource's NIPSCO subsidiary surfaced earlier this year, is making Wall Street analysts and others nervous.
In a note to investors last week, JP Morgan analyst Brooke Mullin questioned the review’s completion and wrote: " ... there may not be a conclusive outcome."
Mullin said that NiSource management had first expected to publish the review at the end of 2006, then pushed the deadline to early 2007, and then delayed it once again.
A review that does not introduce changes will "likely lose credibility with investors who have patiently provided management with over 12 months to pursue the review," she said.
NiSource stock was down about 20 cents in morning trading on the New York Stock Exchange Tuesday, trading at around $25.10 at 2 p.m.
United Steelworkers union members and other officials attended the meeting in force and questioned Skaggs on a number of issues, according to Michael O'Brien, USW Subdistrict 4 director for District 7.
O'Brien also expressed doubt the company will deliver any wholesale restructuring, particularly when it comes to its NIPSCO subsidiary.
"It doesn't make sense to dump what makes 30 percent of your revenue," O'Brien said, referring to NIPSCO. "That's why I thought all along it was just smoke."
Two new members and nine incumbents were elected to NiSource’s board of directors at the meeting.
Joining the board’s ranks were Marty Kittrell, chief financial officer of the Westchester, Ill.-based Andrews Corp., a wireless communication provider; and W. Lee Nutter, chairman of the Jacksonville, Fla.-based timber company Rayonier, Inc.
"Their deep knowledge of business, their understanding of finance and their proven success in leading successful organizations," will complement the experiences of other board members, said board chairman Ian Roland.
Kittrell and Nutter replace retiring members Gary Neale, NiSource’s former chairman and CEO, and Robert Welsh, CEO of Welsh Holdings, a real estate company. Shareholders applauded Neale’s 18 years of leadership at the company.
Under new corporate rules, Kittrell, Nutter and the nine current board members were elected to one-year terms. Board members previously served staggered three-year terms.
-- Times Business Writer Keith Benman contributed to this report
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