GOLDEN Energy and Resources (Gear) on Friday (Mar 3) said that it is working with its advisors and other parties to satisfy the conditions needed to implement the recent contentious transaction that has thrust the company into the spotlight. 

The transaction in question refers to the proposed distribution in-specie of Gear’s stake in Indonesia-listed Golden Energy Mines (Gems), and the subsequent exit offer for Gear at S$0.16 per share. 

On Friday, Gear – acknowledging “various media reports and commentaries” on certain aspects of the deal – said none of the conditions of the proposed transaction had been satisfied. 

The conditions include there being no objections from Indonesian regulators in respect of the proposed distribution and the sale by Dian Swastatika Sentosa (DSS) of all its shares to the offeror, approval by the independent shareholders of DSS over various aspects of the proposed transactions, as well as approval from the Singapore Exchange for the circular to be issued by the company for the resolutions relating to the distribution and delisting. 

“Shareholders should note that there is no assurance that such conditions will be satisfied. If such conditions are not satisfied, the company will not be able to table the proposed transactions to shareholders for their consideration,” the company warned. It added that, in light of this, shareholders should “exercise caution” when dealing with its shares. 

If the conditions are satisfied, Gear said shareholders will have “the benefit of reviewing” disclosures made in the circular, as well as the independent financial adviser’s letter, which will include the adviser’s views and assessment of the financial terms and its opinion on whether the consideration is fair and reasonable. 

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Under the terms of the transaction, Gear shareholders can opt to receive 1.3936 Gems shares for every Gear share they hold; or a cash consideration of 7,664.8 rupiah (which prices their entitlement of 1.3936 Gems shares at 5,500 rupiah each). Following this, the company will delist from the Singapore Exchange at an exit offer price of S$0.16 per share.

Shareholders of Gear who opt to receive Gems shares will get 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.

Gear said the despatch of the circular to shareholders will lead to the company convening an extraordinary general meeting, where independent shareholders in the company – excluding the parties involved in the deal – will have the opportunity to approve or disapprove the distribution and delisting resolutions, which are inter-conditional. 

Independent shareholders can thereafter choose to accept or reject the exit offer if both the distribution and delisting resolutions are approved, and all other conditions are satisfied. 

The company added that if either resolution is not approved by such independent shareholders at the EGM, none of these resolutions will be carried out and the proposed transactions – including the exit offer – will not proceed. 

The company will remain listed on the Singapore Exchange, and the exit offer will lapse, said Gear. 

Shares of Gear fell 1.6 per cent or S$0.015 on Friday to end the week at S$0.905.