Amfac Fires Chief in Policy Dispute
Amfac Inc., whose operations span food processing to hotel management, Friday fired its chief executive and president, Ronald R. Sloan, in an apparent dispute over the company’s proposed restructuring plan.
Sloan, who had been at the helm of the $2-billion San Francisco-based concern since last year, was fired because he disagreed with Chairman Henry A. Walker Jr.’s restructuring plans, according to sources close to the company.
Sloan, who will remain a director, will be replaced by Walker, who was said to favor a much less radical restructuring effort as a way to bolster Amfac’s stock price.
“The rift that developed between Walker and Sloan was a result of their differing opinions on the restructuring plan,” one company source said.
Sloan’s ouster came after Amfac’s investment banker, Morgan Stanley & Co., presented restructuring plans to the company’s board that were rumored to include the sale of Amfac’s vast sugar cane and land holdings in Hawaii.
The restructuring proposal has drawn stiff opposition from Hawaii state officials, including the governor and the attorney general. Amfac’s operations in Hawaii make it one of the state’s largest companies.
Although Amfac did not link Sloan’s removal with the Morgan Stanley proposals, it did say the board was now “uniformly committed to a prudent restructuring.”
Sloan, meanwhile, released his own statement, saying that the Morgan Stanley analysis “does in fact demonstrate that a restructuring plan would substantially increase shareholder value. I hope that the board will review carefully these restructuring proposals and reach a decision at its Dec. 13 meeting that will be in the best interests of its shareholders and the corporation.
“Of course, the ultimate decision as to the direction of the company rests with the shareholders. I will continue to serve as a director so long as I feel my presence will assist the shareholders in achieving their objectives.”
Amfac, which operates food processing businesses and owns the King Kamehameha resort in Kailua-Kona, Hawaii, returned to profitability this year after disposing of a money-losing industrial plumbing supply division in February.
Third-quarter earnings jumped to $11.2 million, contrasted with with a loss of $20.3 million in the year-ago quarter, while revenue climbed to $574.5 million from $490.4 million.
Most analysts said Sloan’s dismissal caught them by surprise and called his departure a blow to the company.
“I did not expect this to happen,” said Sutro & Co. analyst Charles Bureker.
In other board action, Richard L. Griffith, executive vice president and chairman of Amfac-Hawaii, was elected a director. Griffith replaced Richard B. Madden, chairman and chief executive of Potlatch Corp., who had resigned Oct. 2, citing an increased workload at Potlatch.
On Monday, Amfac announced the resignation of Frederick W. Mielke Jr. as a director. Mielke, retired chairman and chief executive of Pacific Gas & Electric Co., cited retirement plans as the reason for his resignation.
