A group of investors in Terran Orbital Corp., which has lost more than 90% of its market value since going public in a blank-check deal last year, is calling on the aerospace and defense company to launch a strategic review and oust its chief executive officer.
(Bloomberg) — A group of investors in Terran Orbital Corp., which has lost more than 90% of its market value since going public in a blank-check deal last year, is calling on the aerospace and defense company to launch a strategic review and oust its chief executive officer.
The group includes Sophis Investments, Roark’s Drift and three co-founders of Terran’s main operating subsidiary, Tyvak Nano-Satellite Systems, according to a letter they sent to the company on Thursday that was reviewed by Bloomberg News.
The investor group, which owns 8.4% of Terran’s outstanding common stock, wants to replace CEO Marc Bell with its own candidate and split up the CEO and chairman roles. That would improve its corporate governance and credibility in the market, they said.
“Given the highly technical and sensitive nature of designing and manufacturing satellite components for the US government and commercial customers, this role requires deep industry expertise, relationships, and a technical understanding of satellite systems,” Sophis founder Tassos D. Recachinas said in the letter. “Based on our rigorous due diligence, we believe our CEO candidate can attract and work to close on more than $1.7 billion of potential satellite orders as well as a pipeline that spans more than 12 separate customers.”
A representative for Terran didn’t immediately respond to a request for comment.
Terran rose 1.6% to 71 cents at 10:24 a.m. in New York trading Thursday, giving the company a market value of about $143 million. It was worth about $1.6 billion when it went public last year via a deal with special purpose acquisition company Tailwind Two Acquisition Corp., according to a statement at the time.
“We recognize that many SPACs have underperformed in the public markets, however, we believe the issues plaguing Terran are largely self-inflicted and can be remediated if the right management team and directors are installed immediately,” they said.
The investors also asked the company to reconstitute its board, which it said had “rubber-stamped poor corporate governance practices” such as approving “excessive” compensation to the management team, according to the letter. The group said it has identified several independent director candidates to join the board, which it said should also be de-staggered.
Read more: Terran Orbital Surges on $2.4 Billion Satellite Contract (1)
Terran received a $100 million investment last year from Lockheed Martin Corp. to help expand its satellite manufacturing capacity. A sale at a “substantial premium” or a debt guarantee from Lockheed Martin or similar third-party would maximize value for stockholders, the investor group said.
“Critically, any strategic review must be conducted after the company has been stabilized under a reconstituted board of directors,” the group said. “We would urge Terran’s board to retain a leading independent investment banking firm, specializing in the space sector and highly regarded by market participants.”
(Corrects penultimate paragraph to accurately reflect debt-guarantee option.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.