Golden Energy raises stake in Stanmore Coal to 51% as part of takeover bid

COAL producer Golden Energy and Resources (Gear) has gained majority control of Stanmore Coal, a day after announcing a renewed takeover offer for the Australian firm.

Mainboard-listed Gear on Thursday made on-market purchases of about 50.3 million Stanmore Coal shares at A$1 apiece in cash, according to a bourse filing on Friday morning.

These shares represent about a 19.7 per cent stake in Stanmore Coal, pushing Gear's stake in the company up to 51 per cent. This makes Stanmore Coal a subsidiary of Gear and its subsidiaries.

The on-market purchases amounted to A$50.3 million (S$43.7 million) in cash.

The bid vehicle for the takeover is Golden Investments (Australia), a joint venture between Gear and Ascend Global Investment Fund.

The offer will be financed with cash to be provided by Gear and Ascend Global.

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Gear will provide the funding to acquire the first 60 per cent of Stanmore Coal shares, while Ascend Global will only subscribe for shares in Golden Investments once the bid vehicle's stake in Stanmore Coal reaches 60 per cent.

Gear will draw on its cash reserves to subscribe for shares in Golden Investments totalling up to A$78.4 million, while Ascend Global has proposed to fund its maximum commitment of about A$107.5 million using undrawn capital commitments of US$75 million from investors in one of its sub funds.

As at Dec 31, 2019, the unaudited net asset value and the net tangible assets of the on-market purchase shares are about A$31.9 million and A$17.5 million respectively.

Meanwhile, the market value of the purchase shares is approximately A$40.5 million, calculated based on the volume-weighted average price of about A$0.8054 per Stanmore Coal share for all trades done on April 1, 2020.

Stanmore's shares have declined 43 per cent from the start of July till April 1. Shares in Gear closed at 18.4 Singapore cents on Thursday, down 1.3 cents or 6.6 per cent.