ahhaha; welcome to the thread....................
Munk names new Barrick CEO
Melnuk has no mining experience, but close ties to chairman
Thursday, April 23, 1998
By Paul Waldie
TORONTO -- Peter Munk is stepping down as chief executive officer of Barrick Gold Corp. and handing the job to an oilman from Winnipeg with no mining experience but with close ties to Mr. Munk.
Paul Melnuk, former head of oil refiner Clark USA Inc. of St. Louis, was named Barrick's CEO yesterday.
Clark was owned by TrizecHahn Corp., also headed by Mr. Munk, for nearly 10 years until it was sold last November to Blackstone Group of New York.
Mr. Munk, who will remain Toronto-based Barrick's chairman, said yesterday that he'd been thinking about making a management change for a year because his workload had become too heavy. Mr. Munk, 70, is also chairman and CEO of TrizecHahn, which is one of North America's largest real estate companies.
"I'm not 35 years old," he joked in an interview yesterday. "There is only so much one can do really well."
Referring to Barrick, he added: "I've built this company from nothing -- we've done very well in the last 15 years -- and I want to be sure that I am around actively while someone I can trust takes the lead."
Mr. Munk said he will continue to provide strategic input at Barrick, one of the largest gold mining companies in the world. He also plans a similar management change at TrizecHahn in about two years.
Mr. Munk played down the fact taht Mr. Memuk, 43, has no mining experience.
"Hell, I wasn't a miner and look what we've done to the gold industry."
Still, Mr. Melnuk acknowledged that he has much to learn.
"My first priority has to be to learn the company, learn the people, learn the industry, learn the business," he said. "Once I've absorbed as much as I can about the company, then we will begin to identify all the alternatives for growth."
Mr. Melnuk said it was too early to outline specific actions he plans to take. But he said: "There are no sacred cows and we will look at all alternatives. My job, among other things, is to make sure that we are challenging everything that we do."
Like most gold companies, Barrick has been hit hard by the falling price of gold. The price dropped nearly $100 (U.S.) an ounce to $280 during 1997. It has rebounded recently and closed yesterday at $313.60.
Last year, Barrick's share price fell to $21.50 (Canadian) on the Toronto Stock Exchange from around $39 in February. The shares closed yesterday at $33.65, up $1.25.
To cope with the falling gold price, Barrick shut five mines last September and announced $385-million (U.S.) in restructuring costs. The actions appear to be working. This week, Barrick announced a first-quarter profit of $75-million, up 33 per cent from a year earlier.
"There is no better time to get involved than when there are challenges out there because it's those challenges that require the creative input," Mr. Melnuk said.
Born in Winnipeg, Mr. Melnuk received a commerce degree from the University of Manitoba and later became a chartered accountant.
He was hired by Mr. Munk in 1988 as chief financial officer of Horsham Corp., Mr. Munk's former holding company.
"Horsham was an infant company that was looking to grow through acquisitions," Mr. Melnuk said. "At the time, we had Barrick shares and $8-million in cash."
Within a few months, Mr. Melnuk orchestrated Horsham's purchase of control of Clark, which was bankrupt at the time. Mr. Melnuk soon began working for Clark and Horsham. In 1992, he became Clark's CEO.
Clark has about $4-billion in annual revenue and nearly 1,000 gas stations across the United States.
Clark was is bad shape when Mr. Melnuk arrived, he said, and the company ran into more problems when oil prices collapsed after the Persian Gulf war ended in 1991.
"Probably, if I was smarter, I never would have taken [the Clark job] on," he said. "It was a company that was in need of very significant change. It had been neglected by the previous ownership."
Mr. Munk said Mr. Melnuk proved himself at Clark because Horsham refused to inject any money into the struggling company.
"He performed miracles," Mr. Munk said. Horsham paid about $18-million for control of Clark in 1988 and sold the stake for about $116-million last November.
Mr. Melnuk's hiring was welcomed by analysts because many have been expecting Mr. Munk to ease his workload.
Mr. Melnuk "is a close and trusted aide to Mr. Munk," said Peter Ward of Lehman Brothers in New York. "At the end of the day, Mr. Munk is still chairman, so you can rest assured that the company is probably going to be run in much the same way that it has been." |
