SINGAPORE - Despite deep reservations by the Securities Investors Association (Singapore), or Sias, and some observers, minority shareholders of coal producer Golden Energy and Resources (Gear) voted overwhelmingly to privatise and delist the company.
Shareholders controlling 507.9 million shares, and representing 99.89 per cent of the vote, said “yes” to the delisting, while 99.91 per cent voted for the proposed distribution of shares in Gear’s Indonesia-listed thermal coal subsidiary Golden Energy Mines (Gems).
Voting took place at an extraordinary general meeting (EGM) on Friday.
The 97.3 cents all-cash exit offer comprises 18.1 cents plus an additional 79.2 cents representing the in-specie distribution of 1.3936 shares in Indonesia-listed thermal coal producer Gems, in which Gear has a 62.5 per cent stake.
However, those opting for Gems shares-plus-cash will have to settle for 96.4 cents in total value.
Shareholders are most likely to opt for the all-cash offering.
The offeror is Dian Swastatika Sentosa (DSS), which abstained from the voting process. DSS, a vehicle of the controlling Widjaja family which owns conglomerate Sinar Mas Group, holds 2.04 billion Gear shares or 77.49 per cent interest in the company.
The results came despite Sias calling on the company’s minority shareholders to reject the proposed offer, citing doubts and disagreement with the valuation of the company. Sias president and chief executive David Gerald was also critical of Gear’s independent financial adviser W Capital, saying its justifications to support the privatisation were “subjective and may not be as convincing as they perceive them to be”.
Critics said that in its original offer, Gear did not take into account the steep rise in the value of its Australian assets – Stanmore and 50 per cent-owned gold miner Ravenswood Gold Group. The listed market values of both companies have risen substantially over the past six months, adding significantly to the underlying value of Gear, they argued.
Despite having secured the votes, the distribution will only take place 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 in a statement following the vote.
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 June 13 at 10 am.