COAL miner Golden Energy and Resources (Gear) has received the green light to go ahead with its delisting plans and to undertake a distribution in-specie of its 62.5 per cent stake in Indonesia-listed thermal coal subsidiary Golden Energy Mines (Gems).

 

At the extraordinary general meeting (EGM) on Friday (Jun 9), shareholders with 508,463,022 shares voted on the two resolutions: one to delist, and the other, a proposed distribution in which they would receive 1.3936 shares of Gems for every Gear share they owned.

 

The resolution to delist received a 99.89 per cent approval the distribution resolution passed with 99.91 per cent approval. (*see amendment note)

 

The offerer and its concert parties, including Dian Swastatika Sentosa, abstained from the voting process. They represented a total of 2,044,145,469 shares, or 77.49 per cent interest in the company, based on 2,638,100,380 total issued shares in the company as at the EGM.

 

This means that 85,491,889 shares, or those holding 3.2 per cent of the company, chose to abstain from the EGM.

 

The company said in a bourse filing: &ldquo Shareholders should note that approving the delisting resolution at the EGM does not automatically mean that the exit offer has been accepted by them.&rdquo

 

Further, the distribution will take place only when certain conditions are met, such as obtaining court approval for capital reduction, as well as regulatory approval for the distribution.

 

If these conditions are not satisfied, the proposed distribution will not go through, Gear said.

 

It added that further updates will be put up on the Singapore bourse if and when all other distribution conditions or exit offer conditions have been satisfied.

 

The court hearing date for the exit and distribution offer has been set for Jun 13 at 10 am.

 

IN ITS latest salvo over coal producer Golden Energy and Resources&rsquo (Gear) privatisation deal, the Securities Investors Association (Singapore), or Sias, doubled down on its call for the company&rsquo s minority shareholders to reject the proposed voluntary delisting.

 

Sias, in its letter signed by president and chief executive David Gerald on Monday (Jun 5), reminded shareholders that it is of &ldquo utmost importance&rdquo that they pre-register for the online extraordinary general meeting (EGM) by 10 am on Jun 6. 

 

Registration is necessary to ensure that they are able to vote on the two critical resolutions &ndash namely a distribution in specie of Gem shares, and the delisting of Gear, he said.

 

He added: &ldquo It is crucial to note that the distribution resolution and the delisting resolution are inter-conditional. If either of these resolutions is not approved at the EGM, none of the proposed resolutions will be carried out.&rdquo

 

The letter came a few days after W Capital, the independent financial advisor (IFA) in Gear&rsquo s exit offer, hit back at Sias&rsquo criticisms of its opinion, by defending its approach to valuing the shares of Golden Energy Mines (Gems) and its valuation methodologies for the exit offer.

 

Gerald on Monday said Sias was exhibiting professional scepticism in publishing its criticisms, reiterating that it agrees with the IFA that &ldquo we can agree to disagree&rdquo .

 

&ldquo We agree, as we stated earlier, with the IFA that no single method of valuation will be met with universal acceptance,&rdquo he added.

 

He also said that while W Capital may consider their reasoning to be clear-cut, Sias&rsquo feedback is that the IFA&rsquo s justifications are &ldquo subjective and may not be as convincing as they perceive them to be&rdquo . 

 

For example, while Geo Energy Resources was included because it is &ldquo broadly comparable to Gear&rdquo , Gerald said Sias can likewise point out that Geo Energy is an Indonesia pure-play with thermal coal assets while Stanmore is a significant metallurgical coal player. 

 

&ldquo These differences raise questions about the true comparability between the two companies,&rdquo he said. 

 

Gerald continued: &ldquo Also, how else can shareholders understand that the IFA &lsquo considered the mid-point value of the (sum-of-the-parts) valuation of Gear of S$1.072 for the maximum value of the shares&rsquo ? 

 

&ldquo Also, as a sense check, what is the EV/TTM Ebitda (enterprise value to earnings before interest, taxes, depreciation and amortisation over the previous 12 months) of Gems, and what is that of Gear?&rdquo

 

Gerald, meanwhile, acknowledged that there are more appropriate channels to address concerns around the fact that IFA opinion has historically been a one-way street, with minority shareholders having no say in the choice of the IFA and the IFA opinion.

 

Nevertheless, with the EGM coming up in a few days, Sias calling on minority shareholders to &ldquo review the EGM circular and vote wisely at the EGM&rdquo , he said. 

 

With a skew of going-private offers hitting the market, Sias stands by its view that the IFA process can be and should be improved, he reiterated. 

 

&ldquo More can clearly be done to protect the investing public when it comes to takeovers-cum-delistings,&rdquo he said. 

 

&ldquo At the end of the day, minority shareholders will make the decision to follow or reject the IFA&rsquo s opinion and the recommendations of the non-conflicted directors.&rdquo