(Reuters) – Air Products said on Monday it would exit three projects in the U.S. and expects to record a pre-tax charge of nearly $3.1 billion in its second quarter to write down assets and terminate contractual commitments.
This comes after the company lost the proxy fight against activist investor Mantle Ridge, which had been pushing the company to replace its 80-year-old chief, by electing three new directors and unseating the CEO from the board.
“The decision to exit these three projects will streamline our backlog and focus company resources on projects that drive value for Air Products’ shareholders,” said Eduardo Menezes, the newly elected chief executive officer of Air Products.
As part of a review initiated by Air Products’ newly-elected board of directors, the company has decided to terminate the agreement with World Energy for the Sustainable Aviation Fuel expansion project in Paramount, California.
It also looks to cancel its plans to construct a 35-metric-ton per day facility to produce green liquid hydrogen in Massena, New York, largely due to recent regulatory developments rendering existing hydroelectric power supply ineligible for the Clean Hydrogen Production Tax Credit (45V).
Lastly, it plans to terminate its carbon monoxide project in Texas.
Air Products said that it does not currently expect any material cancellations going forward, but continues to evaluate its existing backlog.
(Reporting by Seher Dareen in Bengaluru; Editing by Alan Barona)
