Paul Desmarais III delayed his appointment to the board last month after he was slated to join on or around Aug. 9 as the nominee for Sagard.Christinne Muschi/The Globe and Mail
A U.S. investment firm controlled by Canada's wealthy Desmarais family is stepping away from its attempts to name a new director to the board of Performance Sports Group Ltd., but signalled a willingness to play a role in the refinancing of the company's debt.
In a filing on Friday with the U.S. Securities and Exchange Commission, Sagard Capital Partners LP said it has terminated its March 28 shareholder nomination agreement with PSG, which owns Bauer hockey equipment.
Sagard also said it may consider proposals including some involving a refinancing of PSG's debt, according to the filing.
Paul Desmarais III delayed his appointment to the board last month after he was slated to join on or around Aug. 9 as the nominee for Sagard. He would have replaced Dan Friedberg, who had resigned from the board.
A company spokesperson could not be immediately reached for comment late Friday.
Last month, PSG said it is under investigation by the SEC and has also received "inquiries" from Canadian regulators, but declined further comment. PSG is also fending off a class-action lawsuit in the United States, and has postponed both its annual shareholder meeting and the filing of its yearly audited financial statements for 2016 amid questions about its accounting.
The shareholder agreement between PSG and Sagard from March had appointed Mr. Friedberg as a director and also stipulated that with its shares, Sagard would vote to elect all of the other nominees.
With a 16.9-per-cent stake, Connecticut-based Sagard is PSG's largest shareholder. That amounts to 7,721,599 shares, according to Friday's filing.
Sagard stated in the SEC filings that it and PSG ceased their agreement due to the likelihood that PSG would not be able to hold its annual meeting before Oct. 31, which was the date stated in their original contract. On Aug. 22, the beleaguered company disclosed in a filing that it had cancelled its AGM, which was scheduled for Oct. 5.
The company is in a precarious financial position. As of Feb. 28, PSG reported $2.6-million in cash on hand and $439.7-million in total debt.
Earlier this week, PSG said that its credit agreements have been amended. Under the new terms, the company must file or provide the lenders with both its annual and first-quarter financial statements by Oct. 28.
PSG's stock in New York jumped 31 per cent on Friday to $3.56 (U.S.) -- with most of the gains coming in the last hour