GOLDEN Energy and Resources : AUE 0% (Gear) on Monday (Nov 28) announced that all conditions pertaining to its notes exchange transaction have been fulfilled, and the new notes are expected to be listed on the Singapore Exchange on Nov 29.

 

In a regulatory filing, the company added that it has exchanged all its existing notes &ndash its outstanding 8.5 per cent senior secured notes due 2026 &ndash for new notes of the same value due 2027.

 

Gear has also arranged for the cancellation of the existing notes. 

 

The company said it has exchanged a total principal amount of about US$346.3 million of existing notes for the same total principal amount for the new notes, as well as a cash payment equal to the aggregate accrued interest in line with the terms and conditions of the exchange offer. 

 

Following the exchange and cancellation of the exchanged notes, roughly US$28.7 million in aggregate principal amount of existing notes remain outstanding, said the company. 

 

Gear added that it had, on Nov 28, exercised its option to redeem these remaining existing notes at the make-whole price in accordance with the terms of the existing notes indenture on Dec 28. 

 

Gear had on Nov 1 announced that it is looking to restructure or exit all &ndash or substantially all &ndash of its energy coal business. 

 

The rationale for the notes exchange was, the company said then, that it was taking the view of &ldquo loosening certain covenants currently in the indenture governing the existing notes&rdquo . 

 

Such relaxations include changes in the financial ratios in the debt covenant and other amendments to permit the company to restructure or exit all or substantially all of its energy coal business, in line with its plan to reduce its exposure to energy coal, Gear said.

 

 

The Company has also appointed the IFA to advise the Directors who are considered independent for the purposes of the Proposed Distribution, the Delisting and the Exit Offer on whether the terms of the Proposed Distribution and the Exit Offer (when taken together as a single transaction) are fair and reasonable. 

I hope the IFA does a good job in commenting about the cash exit offer of $0.16 per share.  This is too low-ball a figure.  SAC Capital, which is making the offer on behalf of the Widjajas, should revise it upwards.  (I last computed Stanmore Resources, Ravenstock etc to be worth $0.76.  Even offering 21% discount as in the treatment of GEMS shares, the fair cash exit offer should be $0.60. Given that they are stingy, at least $0.30 should be offered!!!)