Investors Warned That Their Money May Go "Up in Smoke"
SAN FRANCISCO, Feb. 11, 2013 /PRNewswire-USNewswire/ -- Teamsters alerted institutional investors attending today's Super Investor Conference 2013 about private equity firm TPG Capital's risky business practices, stating that when TPG took over NEXEO, a chemical distributor, it loaded the company with $600 million in debt and immediately slashed employees' retirement and health care plans.
"It's not just NEXEO workers' retirement security that's in jeopardy," said Neil Messino, Teamsters Local 705 Contract Administrator for NEXEO drivers in Illinois. "It's also the health and safety of both the workers and the communities in which the company operates."
Teamster members distributed educational materials to investors at the conference. Investors learned that since TPG took over NEXEO, several facilities – and the communities surrounding those facilities – have been endangered:
- A hazmat fire forced the evacuation of the NEXEO facility in Willow Springs, Ill. in June, 2012.
- In Tewksbury, Mass., NEXEO was cited for "…fire hazards created by the incompatible storage of flammable liquids."
- On November 16, 2012, a chemical fire burned for hours at NEXEO's Garland, Texas facility. The area within a quarter-mile radius was evacuated as dark smoke surged 7,000 feet into the air, drifting across the Dallas skyline.
Though NEXEO told bondholders that it "may incur significant remediation liabilities in the future," the company is not setting aside any remediation funds. "We are extremely troubled by this whole approach," said Dom Chiovare, President of Teamsters Local 70, based in Oakland, Calif.
Instead, TPG is preparing to seek new money from institutional investors – including union pension funds – to raise capital for future investments. TPG is one of the largest private equity firms in the country, but its last two funds have been generating poor returns.
"If TPG wants to attract investments from worker retirement funds going forward, it must demonstrate an ability to create sustainable businesses in its portfolio that do not put at risk the lives and security of workers and their communities," said Ken Hall, General Secretary-Treasurer of the International Brotherhood of Teamsters.
Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and on Facebook at www.facebook.com/teamsters.
SOURCE International Brotherhood of Teamsters