Reddy Ice Holdings
Inc. has suspended its quarterly dividend, named a new operating chief
and put its sales chief on paid leave after finding he violated company
policies and is associated with "matters that are under investigation."
The ice maker, whose offices were raided in March by
federal officials related to a price-fixing probe, has been struggling
in the wake of its failed $1.1 billion buyout by GSO Capital Partners.
The company has cut expectations during the course of this year and has
seen its stock price plunge to $7.84 as of Friday's close, down 69%
this year and one-quarter the proposed takeover price.
Paul D. Smith is Reddy's operating chief, effective Monday, bringing with him stints at companies including Procter & Gamble Co. and PepsiCo.
He was most recently senior vice president, sales operations and supply
chain at Cadbury Schweppes. Smith succeeds Raymond Booth, who stepped
down in January to pursue other business interests.
Meanwhile, the dividend suspension will save the
company some $9.3 million a quarter as management reviews existing
business and opportunities. President and Chief Executive Gilbert M.
Cassagne said the move "is the best course in light of this year's
weaker than expected operating results and costs related to the ongoing
antitrust investigations and litigation."
Federal prosecutors and attorneys general in 19 states
and the District of Columbia are investigating an alleged criminal
price-fixing conspiracy in the $1.8 billion market for packaged ice,
with the help of a former industry executive who told authorities the
collusion was nationwide and forced up prices for consumers and
Ben Key, Reddy's sales chief, was relieved of his
duties as of Saturday and put on paid leave by a Reddy board committee
conducting its own investigation. That probe is ongoing, the company
said Monday, and that "no conclusions have been reached that any
illegal conduct occurred." A team of executives will oversee Reddy's
sales and marketing efforts in the meantime.
Write to Shirleen Dorman at email@example.com