When Moody's Investors Service downgraded NANA Development Corp. in June, it was something of a tipping point that led to the launch of an online petition, with shareholders calling for a special meeting "to discuss the continued losses" at the company.
Some NANA Regional Corp. shareholders are worried about the future of the company's business arm. Nearly 200 people have signed the petition since it went up last weekend. The Alaska Native regional corporation has more than 14,000 shareholders.
Credit rating agency Moody's downgraded NANA Development over "significant deterioration in operating performance and weak cash flow generation," attributing that to some of the company's core businesses in recent quarters.
NANA Development bills itself as a $1.5 billion holding company, with more than 50 subsidiaries in three business sectors: 50 percent of revenue coming from federal contracting, 27 percent from commercial services and 23 percent from oil and gas, spokeswoman Blythe Campbell said in an email. The services it provides are wide-ranging, including hotel management, data management, engineering, construction and more.
The downgrade, which took the corporation's credit down a notch from Caa1 to Caa2, also projected little to no performance-based dividends to shareholders in the near future. The rating change affects about $300 million of NANA Development's rated debt.
The petition says NANA Development made "poor investment choices," including an oil field services company, GIS (which stands for Grand Isle Shipyard, Inc.); a film company, Evergreen Films Inc.; and Piksik, a filmmaking subsidiary NANA closed last year. James Sears, a shareholder who authored the petition, wrote that "it is time to review the performance of the leadership at NDC, including the Board Chair, President, and Board of NDC."
Comments and signatures have rolled in since it was posted, including some from well-known names in the NANA community.
"Changes are required for NANA to a (s)hareholder-controlled corporation so that transparency and accountability are once again the norm," Harvey Vestal, a member of the board of directors for both NANA Development and the regional corporation, commented on the petition.
Ted Mala Sr., a retired physician who used to be the director of tribal relations and traditional healing at Southcentral Foundation, wrote, "I do not have any idea where (NDC) is headed."
One person simply wrote, "Shareholders have a right to be concerned."
Willie Hensley, a prominent leader in the Alaska Native community who once served as president of both NANA Development and NANA Regional, said over the phone that he supports the petition.
"Like many shareholders, I've become increasingly concerned that NANA is treading on the edge of bankruptcy," he said. "I think we do need to have a more candid conversation about the future of the corporation."
Ely Cyrus, board chairman of the development arm and also a member of the regional corporation's board of directors, said in a written statement that the company has "taken steps to improve the financial contributions of investments made in the past to protect the company moving forward during these challenging economic times."
"Given the instability in the oil markets," he continued in the statement, "it is not surprising that shareholders are concerned about investments we have made in this industry. The Board is aware of the situation and is focusing efforts on mitigating risk to the companies affected." The company would not specify how it is mitigating risk.
"NANA has made many investments in its history," Cyrus said. "Some have been very successful and others have been more challenging. Within the last few years, the board has redefined its strategies and approach opting to focus on our core lines of business."
Campbell, the NANA Development spokeswoman, didn't answer a question via email about how many shareholders might need to call for a special meeting for some sort of action to take place.
"(W)e are a privately held company," she wrote. "We do not have anything to add to our Chairman's statement."