Golden Energy and Resources

[fruitfulness]

It is interesting to note the the Widjaja family is considering a possible acquisition of the company when the shares price is at an all-time high. With more than 77% control of the company at the moment, the GO, if go ahead, has a good chance of success if the offer price is attractive. Assuming a 20% premium, the offer price will exceed $1.

At this price, the Widjaja family still see value in taking the company private. Does that mean the extra ordinary profits we saw in 1H is going to be even better and sustainable for the foreseeable future?

https://links.sgx.com/FileOpen/20221010%...eID=733822

With the completion of takeover of BMC Mitsui Coal Pte Ltd (80% in May 3 2022 and 20% in Oct 7 2022) by Stanmore Resources, its 64.01% Australian subsidiary, these will contribute outsize profits to Golden Energy.  In 1H 2022, with just 2 mths contribution by BMC, the net profit was US$0.11. In 2H 2022, I would expect the net profit to exceed US$0.20 easily, given the trend of the metallurgical and thermal coal prices. Noting Stanmore intend to give out very good dividends, the Widjaja can use the dividend monies to buy out the minority shareholders of Golden Energy.

[fruitfulness]

The revenues of this company tracks coal prices  For the past 6 months, coal prices were hovering above 300 USD so like sampan in high tide, their revenue will rise.

As for the transaction with the family, honestly I am not so optimistic that they would give a fair value, given their current stakes. But this is just an opinion

Based on SOTP,  the  market cap of Golden Energy should be sum of 64.01% of market cap of Stanmore Resources (Aus) and 62.5% of GEMS (Indonesia), 50% of privately held Ravenstock, and some smaller projects.  This should work out to S$1.60 per share currently. Within the next 2 mths, this should reach S$2.00 easily, as Stanmore share price is rapidly on the rise (currently A$2.69, going to surpass its all-time high of A$2.76. Target by 2 analysts are A$3.45 and A$4.86, using different basis)

Widjaja family, should offer at least $1. Realistically, I would expect $1.40. Knowing that they are stingy, maybe an offer of $1.1 tro $1.2 would appeal to some retail investors. But anything less than $1, tells us they are an extremely "rich but smelly" family.

[weijian]

There seems to be a significant deviation between fully cash and cash+GEMS shares. The announcement says that the full cash option offers "price certainty" but somehow it doesn't pass the smell test...It does seem to justify certain VBs' view on the controlling Wijaya family.

On the other hand, brave OPMIs are not able to realize fair value. But for OPMIs, some form of exit that has mean reversion to reduce the "gap between price and value" is already much welcomed.

Golden Energy to delist via cash consideration; offers distribution in specie of shares

Shareholders who choose to undertake the proposed distribution fully in cash will receive S$0.846. Meanwhile, shareholders who opt for the distribution in specie for Gems shares and a cash consideration for the group’s exit offer will receive an estimated value of S$1.045

https://www.businesstimes.com.sg/compani...-specie-of

annoucement: https://links.sgx.com/FileOpen/20221109%...eID=737943

[weijian]

There seems to be some uncertainty and barriers that are creating potential arbitrage opportunities?

SGX RegCo reminds Golden Energy directors that IFA opinion on offer must ‘withstand scrutiny’

Shareholders of Gear who opt to receive Gems shares will be getting a total effective consideration of S$1.045 per share, based on the market price of Gems and SGD-IDR exchange rates at the time of the announcement. Shareholders of Gear who take the cash option for their Gems shares will be getting a lower effective consideration of S$0.846 per share.

Market watchers say the deal undervalues Gear’s remaining assets, which include a 64 per cent stake in Australia-listed metallurgical coal producer Stanmore Resources and a 50 per cent stake in gold miner Ravenswood Gold Group.

And since the deal was announced, Stanmore shares have gained 27 per cent – making the price even less attractive. They closed Friday at A$3.80.

https://www.businesstimes.com.sg/compani...nion-offer

[Ben]

The market price is now way above the fully in cash distribution price of $0.846. Is Mr Market expecting Gear to revise its offer price upwards, after SGX stepped in to says the offer must "withstand scrunty"?

I was disappointed when Gear once again refuses to give a dividend despite being hugely profitable in FY2022, and paint a rather cautious future. So, I was equally surprised by the price movement after the announcement.

[mslee888]

https://www.theedgesingapore.com/news/co...paign=FREE

Jewel is Australia SMR..Gear current offer is ridiculously low.

[weijian]

The market price is now way above the fully in cash distribution price of $0.846. Is Mr Market expecting Gear to revise its offer price upwards, after SGX stepped in to says the offer must "withstand scrunty"?

I was disappointed when Gear once again refuses to give a dividend despite being hugely profitable in FY2022, and paint a rather cautious future. So, I was equally surprised by the price movement after the announcement.

Mr Market is more often right than wrong. With the illustration of the reduction in GEMS share price on the Indonesian exchange, it seems the gap between the all cash-offer and GEM share in specie offer is almost eliminated.

All Cash Consideration increased by 15%, to S$0.973 from S$0.846,

comprising:
o Increase in Cash Alternative Price by 18%, to IDR6,500 from IDR5,500, which will be paid in Singapore Dollars based on fixed SGD:IDR exchange rate, thereby removing forex risk up to date of payment
o Increase in Exit Offer Price by 13%, to S$0.181 from S$0.160

https://links.sgx.com/FileOpen/20230318%...eID=750284

[Ben]

That’s a piece of good news to all OPMI. Certainly, the engagement by SIAS with the company, plus the numerous reports in mainstream media on this GO has not gone unnoticed by the board. Also, the “pre warning” by SGX earlier did have an impact.

[desmondxyz]

That’s a piece of good news to all OPMI. Certainly, the engagement by SIAS with the company, plus the numerous reports in mainstream media on this GO has not gone unnoticed by the board. Also, the “pre warning” by SGX earlier did have an impact.

never mention this is the final offer, so i guess there could be another round of revised offer....

[Ben]

Received the Exit Offer documents. Would like to clarify/confirm my understanding with more knowledgeable buddies.

1. I intent to ultimately accept the All Cash consideration of $0.973
2. I need not have to submit the Exit Offer documents now, as the outcome of the distribution and delisting is dependent on the outcome of the EGM.
3. If the distribution and delisting resolution is approved in the EGM, I just need to submit the Exit Offer documents with my acceptance, and I don't have to do anything else.

Is my understanding correct?