GrafTech Announces Cooperation Agreement with Stockholder Nilesh Undavia

Rhea-AI Summary

GrafTech International (NYSE: EAF) has announced a cooperation agreement with Nilesh Undavia, one of its largest stockholders owning approximately 6.7% of outstanding common stock. As part of the agreement, Sachin Shivaram has been appointed to the Board of Directors effective immediately.

The agreement also includes plans for GrafTech and Undavia to jointly identify an independent candidate for nomination to the Board at the 2025 Annual Meeting. If no mutually agreeable candidate is found in time, they will continue their search for a Board appointment.

Shivaram brings significant industry experience, currently serving as CEO of Wisconsin Aluminum Foundry Company since 2019. His background includes leadership roles at ArcelorMittal S.A. and board positions at several companies including Lodge Manufacturing, Broadwind, and the Green Bay Packers.

Positive

• Agreement reached with major stockholder (6.7% ownership) potentially reducing investor activism risk
• Appointment of new board member with extensive metals industry experience
• Structured plan for additional independent director appointment by 2025

Negative

• None.

Insights

Corporate Governance Expert

This cooperation agreement with 6.7% stakeholder Nilesh Undavia represents a strategic move to enhance board composition and address shareholder concerns. The appointment of Sachin Shivaram brings valuable steel industry expertise, particularly relevant given his experience at ArcelorMittal and current role as CEO of Wisconsin Aluminum Foundry. His diverse board experience across manufacturing companies and educational background combining Harvard, Cambridge and Yale Law credentials suggests strong strategic and legal acumen.

The standstill provisions and voting commitments secured from Undavia indicate a well-structured agreement that provides stability while allowing for constructive engagement. The commitment to identify another independent director shows proactive governance evolution. This type of agreement typically helps avoid costly proxy contests while bringing fresh perspectives to the board, particularly valuable given GrafTech's challenging market position with its $411 million market cap.

Steel Industry Analyst

The strategic significance of Shivaram's appointment extends beyond typical board refreshment. His deep operational experience in the steel sector, particularly from ArcelorMittal, brings important industry intelligence at a time when GrafTech faces significant market challenges in the graphite electrode business. The aluminum foundry expertise from his current role complements GrafTech's customer base understanding, as both industries share similar cyclical dynamics and raw material concerns.

The timing is particularly relevant given the ongoing volatility in steel markets and electrode pricing. Shivaram's combined commercial and strategic planning background could help GrafTech navigate the complex supply chain and pricing challenges in the graphite electrode market, especially important given recent industry headwinds and the company's compressed market valuation.

BROOKLYN HEIGHTS, Ohio--(BUSINESS WIRE)-- GrafTech International Ltd. (NYSE: EAF) (“GrafTech” or the “Company”) today announced that it has entered into a cooperation agreement (the “Cooperation Agreement”) with one of the Company’s largest stockholders, Mr. Nilesh Undavia, who owns approximately 6.7% of the Company’s outstanding common stock.

Pursuant to the Cooperation Agreement, GrafTech has appointed Sachin Shivaram to the Board of Directors of the Company (the “Board”), effective immediately. Additionally, GrafTech and Mr. Undavia will work together to identify a mutually agreed upon independent candidate to nominate for election to the Board at the 2025 annual meeting of stockholders of the Company (the “2025 Annual Meeting”), although if the parties are unable to find a mutually agreeable candidate in time for inclusion on the ballot of the 2025 Annual Meeting, they will continue to work together to find a mutually agreeable candidate to be appointed as a director on the Board.

“We appreciate the constructive dialogue we have had with Mr. Undavia over the course of the past year and believe that the appointment of Mr. Shivaram is in the best interests of the Company and our stockholders given Mr. Shivaram’s vast experience in the steel industry,” said Henry R. Keizer, Chair of the Board of GrafTech.

“I want to express gratitude for the collaborative engagement I have had with the Company over the past year, culminating in the selection and acceptance of a highly qualified, independent Board candidate, Mr. Shivaram. Stockholders will benefit from the expertise of Mr. Shivaram, who is highly accomplished in the global metals industry,” said Mr. Undavia.

Mr. Shivaram has served as the Chief Executive Officer of Wisconsin Aluminum Foundry Company, Inc., a century-old, family-owned manufacturer of aluminum and copper-based alloy castings, since 2019. Mr. Shivaram began his career at ArcelorMittal S.A., one of the world’s largest steel and mining companies, rising to the head of strategy and marketing for a business unit with production facilities across North and South America. Mr. Shivaram serves on the board of directors of Lodge Manufacturing Company, Broadwind, Inc., Vollrath Company, LLC and the Green Bay Packers, Inc. He also serves on the board of the Wisconsin Council on Workforce Investment and is a trustee of Lawrence University. He earned a Bachelor of Arts in history and literature from Harvard University, a Masters in social and political sciences from the University of Cambridge and a Juris Doctor from Yale Law School. He is a bar-certified attorney.

In connection with the appointment of Mr. Shivaram, Mr. Undavia has agreed to customary standstill provisions and voting commitments during the term of the Cooperation Agreement. The Company will file the Cooperation Agreement as an exhibit to a Current Report on Form 8-K with the United States Securities and Exchange Commission (“SEC”).

Jones Day is serving as legal advisor to the Company. Vinson & Elkins L.L.P. is serving as legal advisor to Mr. Undavia.

About GrafTech

GrafTech International Ltd. is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals. The Company has a competitive portfolio of low-cost, ultra-high power graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We are the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, our key raw material for graphite electrode manufacturing. This unique position provides us with competitive advantages in product quality and cost.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views with respect to, among other things, financial projections, plans and objectives of management for future operations, and future economic performance. Examples of forward-looking statements include, among others, statements we make regarding future estimated volume, pricing and revenue, anticipated levels of capital expenditures and cost of goods sold, and guidance relating to adjusted EBITDA and free cash flow. You can identify these forward-looking statements by the use of forward-looking words such as “will,” “may,” “plan,” “estimate,” “project,” “believe,” “anticipate,” “expect,” “foresee,” “intend,” “should,” “would,” “could,” “target,” “goal,” “continue to,” “positioned to,” “are confident,” or the negative versions of those words or other comparable words. Any forward-looking statements contained in this press release are based upon our historical performance and on our current plans, estimates and expectations considering information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will be achieved. Our expectations and targets are not predictions of actual performance and historically our performance has deviated, often significantly, from our expectations and targets. These forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements.

Additional factors are described in the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections in reports and statements filed by the Company with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250109094172/en/

Michael Dillon

216-676-2000

Source: GrafTech International Ltd.

FAQ

What are the key terms of GrafTech's (EAF) cooperation agreement with Nilesh Undavia?

The agreement includes the immediate appointment of Sachin Shivaram to the Board of Directors and plans to identify a mutually agreed independent candidate for the 2025 Annual Meeting. Undavia agreed to customary standstill provisions and voting commitments.

How much of GrafTech (EAF) stock does Nilesh Undavia own?

Nilesh Undavia owns approximately 6.7% of GrafTech's outstanding common stock, making him one of the company's largest stockholders.

What is Sachin Shivaram's background and experience relevant to GrafTech (EAF)?

Sachin Shivaram is currently CEO of Wisconsin Aluminum Foundry Company, has previous experience at ArcelorMittal S.A., and serves on multiple boards including Lodge Manufacturing, Broadwind, and the Green Bay Packers.

When will GrafTech (EAF) appoint the additional independent board member?

GrafTech plans to nominate a mutually agreed independent candidate at the 2025 Annual Meeting, but if no candidate is found in time, they will continue searching for a board appointment after the meeting.