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SGX waives shareholder approval requirement for Golden Energy's A$70m JV investment
GOLDEN Energy and Resources will not require shareholder approval for its A$70 million (S$59 million) investment in a joint venture (JV) to acquire the Ravenswood gold mine in Australia, it said on Monday night.
This comes after the Singapore Exchange (SGX) granted it a waiver, and Golden Energy's 86.9 per cent majority shareholder PT Dian Swastatika Sentosa had given its support for the acquisition.
The waiver stated Golden Energy was required to consult SGX on whether shareholder approval was needed for any investment beyond the initial A$70 million.
In explaining the grounds for seeking the waiver, Golden Energy said Indonesia-based coal firm PT Dian Swastatika Sentosa had provided an irrevocable undertaking to vote in favour of the gold mine acquisition and any further capital commitment.
It added there was no material change in its risk profile due to the JV investment and gold mine acquisition, and the transactions are in the interest of the company and its shareholders.
The company is using its existing cash reserves to fund the JV, but will have enough reserves for its working capital after the transaction, it said.
As at Dec 31, 2019, Golden Energy had a cash balance in excess of US$177 million.
It also does not expect the JV investment to have a significant adverse impact on its consolidated earnings and gearing.
In the absence of an independent valuer on the gold mine, SGX said Golden Energy must explain how its board found the potential A$300 million purchase consideration reasonable.
The company's management team had conducted a comprehensive internal evaluation and valuation of the gold mine based on various methodologies, Golden Energy said.
It arrived at a valuation of between A$200 million and A$300 million based on the discounted cash flows method, which was the lowest among all methodologies the company had used.
Golden Energy previously said it would buy the gold mine for up to A$300 million, and aimed to complete the deal by March 31, 2020.
Golden Energy shares closed down one Singapore cent or 8.1 per cent to 11.4 cents on Monday before the announcement was made.