The resignation of Nippon Sheet Glass’ CEO caused a decline in share price, sending them down to their lowest level since the mid-1970s. Investors were already disconcerted by the company’s February forecast of a return to a net loss for the third time in four years in the 12 months ended March, accompanied by a restructuring plan to turn around troubled operations, and a programme of 3,500 job cuts globally.
Nippon Sheet Glass Co. investors were keen to sell shares in Japan’s second-biggest glassmaker after the resignation of CEO Craig Naylor, sending them sharply down to close at their lowest level since the mid-1970s.
In his first comments since his surprise resignation over what Nippon Sheet Glass called “fundamental disagreements” regarding turnaround strategy, the American executive, a former DuPont Co. (DD) veteran, said that his decision to leave less than two years after taking up the job was “entirely my own.”
Investors were already disconcerted by the company’s decline, which was not improved by the company’s February forecast of a return to a net loss for the third time in four years in the 12 months ended March, accompanied by a restructuring plan to turn around troubled operations, and a programme of 3,500 job cuts globally.
Its share price declined almost 50% during Naylor’s time in office, dropping even more in mid-April, losing 7% to close at JPY 108 in heavy trading, its lowest level in decades.
With almost 90% of its revenue in the construction and auto glass sectors, Nippon Sheet Glass has suffered by economic weakness in Europe.
At a news conference to announce Naylor’s departure, Chief Financial Officer Mark Lyons said the company has no immediate plans to raise further capital, but added all options would be considered going forward.
In the one-paragraph statement Naylor emailed to The Wall Street Journal, he said, “I recognize that the board should have a CEO who is fully committed to the direction it sets. As a result, I thought it best if I were to tender my resignation.”
Observers said, however, that along with the lack of detail on any precise trigger for Naylor’s departure, speculation on exactly how tough trading has been for the company could weigh on the shares pending Nippon Sheet Glass’s disclosure of results for the 12 months ended March due 10 May.
According to Credit Suisse analyst Jun Yamaguchi there “was not enough incremental information on the weak business environment and restructuring plan to confirm that all the bad news has been exhausted.”