Forum Home Page [see Broadridge note belo


The Shareholder Forumtm

support for fair value realization

of stock investments in

DBM Global Incorporated

(f/k/a Schuff International Inc.)



Support of Minority Shareholder Interests

The Shareholder Forum had offered to support Appraised Value Rights ("AVR") of DBM (f/k/a Schuff International) minority shareholders in 2014 following a $31.50 per share tender offer by the company's controlling shareholder, HC2 Holdings, Inc., with the stated intent to proceed with a short-form merger "as soon as practicable.”

HC2 acquired DBM shares in the 2014 tender offer and other purchases bringing its total holdings to 92% of outstanding DBM shares, but has not proceeded with a merger. The Forum has continued to support the minority shareholder interests of its AVR participants in this context.





Source: Standard & Poor's Ratings Services, November 4, 2014 report

HC2 Holdings Inc. Assigned 'B' Corporate Credit Rating; Outlook Stable; Senior Secured Notes Rated 'B'

Publication date: 04-Nov-2014 22:24:02 GMT

  • Herndon, VA-based operating holding company HC2 Holdings Inc. plans to issue $250 million senior secured notes to refinance outstanding borrowings under its credit facility, which it had used previously to make acquisitions.
  • We are assigning our 'B' corporate credit rating to HC2.
  • We are also assigning our 'B' issue rating and '4' recovery rating to the company's proposed $250 million senior secured notes.
  • The stable outlook reflects our expectation for continued weak asset diversity and stretched coverage metrics over the next year, along with our expectation for liquidity to remain "adequate," particularly given cash balances pro forma for the proposed note issuance.

NEW YORK (Standard & Poor's) Nov. 4, 2014--Standard & Poor's Ratings Services today said it assigned its 'B' corporate credit rating to Herndon, VA-based operating holding company HC2 Holdings Inc. The rating outlook is stable.

At the same time, we assigned our 'B' issue rating and '4' recovery rating to the company's proposed $250 million senior secured notes. The '4' recovery rating indicates our expectation for average (30%-50%) recovery in a payment default scenario.

Our rating on HC2 reflects the company's weak asset diversity, with portfolio concentration in two companies (Schuff International Inc. and Global Marine Systems Ltd. [GMSL]); limited financial flexibility, with significant asset value in controlled companies; as well as a short track record, with the stated investment strategy of seeking controlling equity stakes and maintaining ownership over an extended time horizon. We expect coverage metrics will remain stretched and potentially volatile over the next two years, given the company's asset profile and limited track record.

"The stable rating outlook reflects our expectation for continued weak asset diversity and stretched coverage metrics over the next year," said Standard & Poor's credit analyst Robyn Shapiro. "But it also reflects our expectation for liquidity to remain adequate, particularly given cash balances pro forma for the proposed note issuance."

We expect a total debt service coverage ratio of about 1x in fiscal 2015, and we anticipate dividend capacity at existing portfolio companies could support coverage.

We could lower our ratings if HC2's liquidity profile weakens to "less than adequate." We believe this could occur if dividends from the two main portfolio investments fall as a result of an unexpected decline in operating performance at one or more operating subsidiaries, because of project losses, for example. Alternatively, this could occur if HC2 acquires companies that are unable to pay consistent dividends, resulting in secured debt coverage sustained below 1x.

We could raise our ratings if HC2 acquires companies that pay consistent dividends, which would reduce the expected volatility of the company's cash flow sources and would strengthen asset diversity. In this scenario, HC2 would need to maintain the total debt service coverage ratio consistently above 2x.



Related Criteria

Related Research

Economic Research: U.S. Economic Forecast: Swinging Into September, Sept. 24, 2014

Complete ratings information is available to subscribers of RatingsDirect at and at All ratings affected by this rating action can be found on Standard & Poor's public Web site at Use the Ratings search box located in the left column.


Primary Credit Analyst:

Robyn P Shapiro, New York (1) 212-438-7224;

Secondary Contact:

Michael E Durand, CFA, New York (1) 212-438-1138;

Recovery Analyst:

Greg T Maddock, New York (1) 212-438-7205;


No content (including ratings, credit-related analyses and data, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of S&P. The Content shall not be used for any unlawful or unauthorized purposes. S&P, its affiliates, and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P’s opinions and analyses do not address the suitability of any security. S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, (free of charge), and and (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to:


Copyright © 2014 Standard & Poor’s Financial Services LLC, a part of McGraw Hill Financial.




The project supporting investor interests in DBM Global Incorporated (f/k/a Schuff International, Inc.) is being conducted by the Shareholder Forum for the benefit of Participants that have reserved Appraised Value Rights ("AVR") Management, subject to conditions including standard Forum policies that each Participant is expected to make independent use of information obtained through the Forum and that participation is considered private unless the Participant specifically authorizes identification.

Inquiries may be sent to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.