An activist investor has taken a stake in Charlotte-based Babcock & Wilcox Enterprises and is making a push for cost-cutting and other changes at the company, which has seen a steep slide in its stock price.
VIEX Capital, led by managing partner Eric Singer, said in a securities filing Wednesday that it has acquired 2.8 million shares, or 6.4 percent of the company’s outstanding stock, since mid-September. B&W shares were up 4 percent to $4.12 in afternoon trading.
In 2015, the Babcock & Wilcox Co. spun off its power-generation business to become Charlotte-based Babcock & Wilcox Enterprises, which provides energy and environmental technologies and services to power and industrial customers. The rest of the company became BWX Technologies, based in Virginia.
Since the spin-off, B&W Enterprises has seen its shares lose nearly 80 percent of their value as the company faces a series of challenges, including losses in its renewable energy business.
Because of the stock decline and other issues, VIEX believes the company’s board “must take immediate action to monetize assets and make aggressive cost reductions, including corporate overhead, to enhance liquidity,” the firm said in the filing.
If the board doesn’t come up with a plan for cost reductions and divestitures by the time it reports third-quarter earnings next month, VIEX said it may seek to remake the board at next year’s annual shareholder meeting.
Ryan Cornell, a B&W spokesman, said the company “welcomes open communications with its shareholders.” The company is always looking for ways to cut costs, he said, declining to discuss any specific plans.
B&W has about 100 employees in Charlotte and 5,000 worldwide.
Driven by a $115.2 million charge in its renewable business, B&W reported an operating loss of $144.6 million in the second quarter of this year, compared to a loss of $72.6 million a year earlier.
The company also faces a shareholder suit in federal court in Charlotte in which plaintiffs allege B&W, CEO James Ferland and chief financial officer Jenny Apker defrauded investors by making false and misleading statements. The company declined to comment on the suit.