By Rhiannon Hoyle
SYDNEY--Australia's largest listed gold miner Newcrest Mining Ltd. (NCM.AU) unveiled plans to overhaul its top ranks, with Chairman Don Mercer to retire within months and Chief Executive Greg Robinson due to stand down next year, as the company works to rebuild credibility following the biggest annual loss in its history.
The Melbourne-based miner has been engulfed by controversy over the way it disclosed details of a business review that included writedowns worth 6.23 billion Australian dollars (US$5.87 billion) in June--just days after several banks slashed their outlook on the company--sparking a regulatory probe.
A spokeswoman for Newcrest said the planned departures of Mr. Mercer and Mr. Robinson weren't related to the recent storm over the company's disclosure practices, which Australia's corporate watchdog is still investigating.
Once the darlings of stock markets around the world, gold miners have been driven onto the back foot by a sharp slump in the price of the precious metal since the start of the year. This has prompted many mining companies to slash spending, close mines, lay off workers and scale back executive pay.
Newcrest is one of the world's biggest gold miners, competing with Goldcorp Inc. (GG), Barrick Gold Corp. (ABX) and Newmont Mining Corp. (NEM).
The company Wednesday named Sandeep Biswas as chief operating officer starting Jan. 1, with a view to him succeeding Mr. Robinson as chief executive in the second half of 2014. Mr. Biswas was previously chief executive of Pacific Aluminium, a unit of Rio Tinto PLC (RIO).
"After eight years with Newcrest, it is time to ensure there is an organized succession for the chief executive role," Mr. Robinson said in a statement to the Australian Securities Exchange.
Newcrest director Peter Hay, who was appointed to the board in August, will succeed 72-year-old Mr. Mercer as chairman when he retires in December, the company said.
Shares in the company have slumped by two-thirds since mid-2011, when Mr. Robinson, previously chief financial officer, was appointed as chief executive. Gold prices broke to an all-time high that September as the U.S. bond-buying program and sovereign debt crises in the euro zone sparked demand for perceived lower-risk assets, like bullion and bonds. It has since fallen around 30%.
The decline in gold prices, which broke a 12-year bull run for the precious metal, sparked the multibillion dollar writedowns against the value of Newcrest's assets and investments, first flagged to the market as part of a business review in June. Concerns were raised, however, that the company may have selectively disclosed details to brokers early.
While an independent probe, commissioned by Newcrest and conducted by former chairman of Australia's stock exchange Maurice Newman, found no serious misconduct in how the news was disclosed, the Australian Securities and Investments Commission investigation is ongoing.
"This is obviously a reflection of investor dissatisfaction with the way management has handled conditions over the past little while," said Angus Gluskie, Sydney-based managing director of White Funds Management, which holds Newcrest shares. "It shows people are after some change in approach for the future."
Earlier this week, Institutional Shareholder Services Inc., an independent proxy voting and corporate governance advisory firm, called for shareholders to vote against the reelection of directors Richard Lee, Tim Poole and John Spark, members of Newcrest's audit committee, in the wake of the disclosure controversy.
The Newcrest spokeswoman said next year was a natural handover point for Mr. Robinson, however, after the completion of two major projects; the expansion of its Cadia Valley site in New South Wales state and an upgrade of its Lihir plant in Papua New Guinea.
BlackRock Inc, one of Newcrest's biggest shareholders, with more than 10% of its stock, declined to comment on the shakeup of the miner's top brass.
Newcrest shares rose 0.9% Wednesday, outpacing a 0.3% rise in Australia's top 200 materials stocks.
"The fact that it's not higher, I think, shows the market recognizes management is only one of the ingredients for the stock," said White Funds' Mr. Gluskie. "I'd say it's a step forward, but people will more likely play this stock based on the outlook for gold, so it's certainly not the be-all and end-all for Newcrest."
Write to Rhiannon Hoyle at email@example.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 09, 2013 03:43 ET (07:43 GMT)Copyright (c) 2013 Dow Jones & Company, Inc.
|Gold Miner Newcrest Overhauls Top Ranks (2013/10/8)|
|UPDATE: Gold miners drop over 50% with no bottom in sight (2013/12/6)|
|UPDATE: Gold trims gains but still up after Summers news ()|
|UPDATE: Most Asian markets rebound after heavy losses (2013/8/8)|
|UPDATE: Miners, banks lead FTSE higher after China data (2013/9/10)|
|UPDATE: Monsanto shares slip after Q4 loss, buyout news (2013/10/2)|
|UPDATE: U.S. stocks decline after record rise (2013/10/21)|
|UPDATE: U.S. stocks steady after record rise (2013/10/21)|
|UPDATE: European stocks rise after worst loss in a month (2013/10/3)|
|Premier Gold releases updated mineral resource estimate on Hardrock deposit (2013/10/29)|
|Start Premium Trial||Register For Free|
|P||F||Fund Financial Data (13,000+ funds)|
|P||F||Stock Financial Data (7,000+ stocks)|
|P||F||Stock and Fund Screeners (basic)|
|P||F||Investing Articles and Market Commentary|
|P||F||Articles Archive (>30 days)|
|P||F||Discuss (dozens of stock, fund, bond, and general bulletin boards)|
|P||F||Portfolio Manager (basic)|
|P||F||Morningstar Investment Classroom|
|P||F||Access Your Portfolio Anytime, Anywhere via Your Mobile Device|
|P||Morningstar Fund Analyst Reports (full research on 1,700 funds, ETFs, and CEFs)|
|P||Morningstar Stock Analyst Reports (full research on more than 1,100 stocks)|
|P||Portfolio Manager (advanced with 10 X-Ray analyses, including recommendations)|
|P||Portfolio Monitor (monthly and on-demand personalized portfolio statements)|
|P||Morningstar Proprietary Stock Information (stock star ratings, buy/sell prices, economic moat ratings, and more)|
|P||Morningstar 5-Star Stock and Fund Favorites & Red Flags eNewsletters|
|P||Premium Stock and Fund Screeners (advanced with nearly infinite ways to find the best securities for you)|
|P||Discounts on Morningstar newsletters, books, seminars, and more|
Access these features and more when you sign up for Free Membership.
Join Morningstar today. It's Free.
Access these features and more when you sign up for Premium Membership.
Start your free 14-day trial today online
Your subscription may be tax deductible. Please contact your tax advisor.