Appaloosa Management Calls for Overhaul of Luxembourg’s Influence in SES

Amidst a push from a US-based shareholder to scale back the central role played by the Luxembourg government in decisionmaking at the satellite company Société Européennes des Satellites (SES), Prime Minister Luc Frieden on Tuesday affirmed that the government will push to keep its voting rights as they are.

“SES is listed on the stock market and its shareholders decide what they think is right for the company. The Luxembourg government supports SES and recognises its importance. The state, represented by the government, has no intention of surrendering the voting rights it currently has under the statutes of SES,” Frieden said on the floor of parliament.

He also said that if a situation arose in which the SES board went through reorganisation, then the government will insist, “provided we get a majority of votes, that the state will retain the same proportion of seats on the new board as it has now.”

Frieden argued that despite SES being an international company, its “substantial activity” is carried out from Luxembourg.

The prime minister’s intervention comes a few weeks after the US investment fund Appaloosa Management, which owns about 7% of SES, called for an overhaul of the central role of the Luxembourg government.

The investment fund described SES’s existing share structure – divided between A shares for private investors and B for Luxembourg state holdings – as “an antiquated relic that disenfranchises shareholders and discourages investors and customers from taking the company seriously as an authentic commercial enterprise”.

The fund has also called for the scrapping of the Luxembourg government’s powers to approve new shareholders beyond set thresholds. A streamlined board of no more than nine members should be introduced, the fund said, and the Luxembourg state should receive “no more seats than its proportionate interest merits”.

Earlier this month, the Luxembourg Times reported that SES had rejected proposals by Appaloosa Management to cut out the government and two state-owned banks that now control a third of the company’s voting rights.

SES did announce plans to forge closer ties with the US establishment by adding new members to the board who are known to be close to the Pentagon.