PARIS May 15 Shareholders in French cable firm Nexans' will vote on Thursday on a resolution to push chairman and chief executive Frederic Vincent off the board.
The resolution, forced onto the annual shareholder meeting agenda by 5.5 percent-shareholder and hedge fund Amber Capital, has won the backing of two major shareholder advisory groups, ISS and Proxinvest.
It comes after Nexans reported a loss in 2013 and skipped its dividend for the year after being forced to raise new share capital in October, blaming a lack of growth in Europe and industry overcapacity.
Local media reports said the pre-AGM board meeting would consider something Amber has been pushing for since last year - a split of the chairman and chief executive roles. Chief operating officer Arnaud Poupart-Lafarge is seen as the natural successor for the CEO role.
Nexans declined to comment and said Thursday's vote was a matter for shareholders. In the past it has said it has no plans to split the roles.
Although shareholders have the power to vote Vincent off the board and thereby end his reign as chairman, only the board itself has the power to remove him as CEO. He has held both roles since 2009.
Nexans' dominant shareholder with 28 percent is Invexans, a holding company run as a separate business from the 70-year-old Chilean copper goods business Madeco, where it has its roots, and which in turn is controlled by the Chilean Luksic family's Quinenco.
Madeco became an 8.9 percent shareholder in 2008 when it sold its own cables division to Nexans.
Under a shareholder agreement amended in 2012, Invexans has built its stake to 28 percent and can propose three board members. The agreement commits Invexans to a lock-up agreement where it must hold at least 25 percent of Nexans until Nov. 26, 2015, and not more than 28 percent.
The second- and third-largest shareholdings in Nexans belong to Manning & Napier Advisors, a U.S. value fund, and BPI, the French government investment vehicle, both with just under 8 percent. BPI bought its stake in 2009 to "stabilise and reinforce" the company's shareholder base. BPI and Invexans have not responded to Reuters requests for comment on the resolution.
Nexans and Prysmian together are the dominant players in an industry that develops, designs, produces, supplies and installs of cables, mainly to the energy and telecom sectors.
Nexans stock is also in the crosshairs of a number of hedge funds betting on losses in the shares.
According to data from Markit, about 10 percent of Nexans' outstanding shares are on loan, making it one of the most shorted stocks on the French bourse.
Short selling, popular with hedge funds, involves selling borrowed shares in the hope of buying them back more cheaply later and pocketing the difference. Short sellers usually target shares in struggling companies underperforming their sectors. (Reporting by Andrew Callus, Gilles Guillaume and Blaise Robinson; editing by Mark John)