Golden Energy proposes break-up and delisting in deal that values company at S$2.8b

COAL miner Golden Energy and Resources (Gear) wants to exit its thermal coal business and delist from the Singapore Exchange, and is offering its shareholders cash or a combination of cash and shares to do so. The proposed deal values the company at up to S$2.8 billion, which is above the company’s market capitalisation but below the market-implied value of its subsidiaries.

Gear is proposing a distribution in specie of its 62.5 per cent stake in Indonesia-listed thermal coal subsidiary Golden Energy Mines (Gems). Thermal coal, or energy coal, is coal used to generate energy.

Gear shareholders would receive 13,936 Gems shares for every 10,000 Gear shares they own, which works out to a value of about S$8,850 based on Gems’ share price of 7,100 rupiah on Nov 8 – before the deal was announced. If they do not want the shares, however, shareholders can choose instead to received cash of 76.6 million rupiah, equivalent to S$6,855.81 at the prevailing exchange rate.