Filing Details

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.         )*

Methanex Corporation

 

(Name of Issuer)

Common Stock

 

(Title of Class of Securities)

59151K108

 

(CUSIP Number)

800 Waterfront Centre, 200 Burrard Street, Vancouver, BC, V6C 3M1, Canada

 

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

15 March 2017

 

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☒

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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CUSIP No. 59151K108		13D		Page 2 of 6 Pages

 

1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)   M&G Investment Management Limited No I.R.S. Identification Number
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a)  ☐ (b)  ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS (see instructions)   OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)    ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION   United Kingdom, England

NUMBER OF SHARES     BENEFICIALLY     OWNED BY EACH REPORTING PERSON WITH				7.		SOLE VOTING POWER   17,510,018
				8.		SHARED VOTING POWER   0
				9.		SOLE DISPOSITIVE POWER   17,510,018
				10.		SHARED DISPOSITIVE POWER   0

11.		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   17,510,018
12.		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)    ☐
13.		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   19.50%
14.		TYPE OF REPORTING PERSON (see instructions)   IA

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CUSIP No. 59151K108		13D		Page 3 of 6 Pages

 

1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)   M&G Global Dividend Fund No I.R.S. Identification Number
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a)  ☐ (b)  ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS (see instructions)   OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)    ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION   United Kingdom, England

NUMBER OF SHARES     BENEFICIALLY     OWNED BY EACH REPORTING PERSON WITH				7.		SOLE VOTING POWER   0
				8.		SHARED VOTING POWER   0
				9.		SOLE DISPOSITIVE POWER   0
				10.		SHARED DISPOSITIVE POWER   0

11.		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   15,122,662
12.		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)    ☐
13.		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   16.84%
14.		TYPE OF REPORTING PERSON (see instructions)   IV

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CUSIP No. 59151K108		13D		Page 4 of 6 Pages

Item 1. Security and Issuer.

This statement relates to the shares of common stock of Methanex Corp, a British Columbia corporation (the Issuer). The address of the principal executive offices is:

800 Waterfront Centre, 200 Burrard Street, Vancouver, BC, V6C 3M1, Canada

Item 2. Identity and Background.

 

(a)	This Schedule 13D is being filed by M&G Investment Management Limited, a company incorporated under the laws of England and Wales.

(b)	The address of the principal office of M&G Investment Management is Governors House, Laurence Pountney Hill, London, EC4R 0HH.

(c)	The principal business of M&G Investment Management is investing in securities.

(d)	None of the reporting persons have, during the last 5 years, been convicted in a criminal proceeding (excluding traffic violations of similar misdemeanours).

(e)

None of the Reporting Persons have, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceedings was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source or Amount of Funds or Other Consideration.

The funds for the purchase of the Shares came from the investment capital of M&G Investment Management.

Item 4. Purpose of Transaction.

The Reporting Persons believe that the current market price of the Shares does not reflect the Issuers intrinsic value. With this in mind, the Reporting Persons have an extremely strong view regarding the future capital allocation policy of the Issuer going forward. We applaud the dividend policy of the Issuer and would like this to continue with no alterations. Our view on the future capital allocation policy is specific to the use of excess cash flow generated by the Issuer after maintenance capital expenditure, interest and tax payments, as well as the dividend and other cash payments. We believe this excess cash flow should be solely directed towards share buybacks until the share price appreciates beyond the replacement cost of their assets.

The Reporting Persons have been supportive shareholders since 2007 but have become repeatedly frustrated with the market valuation of the Issuer, which the Reporting Persons believe does not reflect the Issuers intrinsic value.

The Reporting Persons are supportive of the current progressive dividend policy of the Issuer, but given the current share price is significantly below the replacement cost of its assets (estimated by the Issuer to be US$1,100 per tonne (source : Methanex Investor Presentation March 2017), the Reporting Persons view is that :

 

●

any and all surplus capital outside the proposed modest capital expenditures targeted towards the issuers Chilean assets should be solely directed towards share buybacks until the share price appreciates beyond the replacement cost of the Issuers assets which based on the companys own disclosure equates to as much as double the current share price;

 

●

that every share purchased at a discount to the replacement cost of the Issuers assets accretes significant value to all shareholders equally; and

 

●

there should be no cash retained on the balance sheet beyond what is required to maintain the existing portfolio of assets to a high standard (which the Reporting Persons estimate conservatively to be a maximum of $200m).

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CUSIP No. 59151K108		13D		Page 5 of 6 Pages

If, as a result of these actions over the medium term, the share price still does not reflect at least the Issuers replacement cost of its assets then the Issuer should undertake a strategic review to either high grade the portfolio by selling assets that can be realised at a price materially above the value implied by the Issuers current equity value and use the proceeds to buy back shares or sell the whole business in order to realise its value.

The Reporting Persons note that the Issuer has in the past undertaken significant share buybacks at valuations below replacement cost, resulting in significant subsequent value accretion for shareholders. With this experience and history in mind, the Reporting Persons would reiterate this to be the only sensible strategy for the Issuer in the short term.

The Reported Persons have been shareholders since 2008 and have been repeatedly frustrated with the market valuation of the company. Post the completion of the relocation of the Chilean assets to the US, we believe the Issuer is finally now in a strong position to take advantage of this situation by using its strong cash generation to repurchase shares. The Reported Persons will consider voting against the re-election of certain board members should the Issuer choose an alternative route.

Item 5. Interest in Securities of the Issuer.

To the best knowledge of the reporting persons, no person other than the reporting persons identified in this schedule 13D have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities beneficially owned identified herein.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Not Applicable.

Item 7. Material to Be Filed as Exhibits.

Not Applicable.

Item 5. Interest in Securities of the Issuer.

Not Applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Not Applicable.

Item 7. Material to Be Filed as Exhibits.

Not Applicable.

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CUSIP No. 59151K108		13D		Page 6 of 6 Pages

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date:  March 23, 2017