Wilton Resources Corporation proposes restructuring exercise

CATALIST-LISTED gold miner Wilton Resources Corporation on Saturday announced a proposed restructuring exercise that would involve subsuming PT Renuka Coalindo Tbk, an Indonesia Stock Exchange listed company that deals in wholesale and export trading, especially in mining commodities.

This would take place largely through a share swap exercise between the company's subsidiaries, Wilton Resources Holdings (WRH) and PT Wilton Investment (PT WI), and Renuka.

WRH intends to enter a conditional standby buyer agreement with Renuka, which will appoint WRH to be the standby buyer in a rights issue exercise by Renuka.

WRH would be entitled to subscribe for new shares to be issued by Renuka in the rights issue, for about 3.77 trillion rupiah (or about S$350 million). WRH would satisfy the subscription consideration for the relevant rights shares by transferring all of its shareholdings in PT WI to Renuka. 

This would make WRH a controlling shareholder of Renuka, which in turn would hold 99 per cent of the issued shares of PT WI. (The other one per cent is held by Wilton Resources Corporation's executive chairman and president Wijaya Lawrence.)

After the proposed rights issue is completed, WRH will purchase from an independent third party about 241 million existing shares of Renuka and the receivables of the third party from Renuka at no less than US$1.7 million, which follows from a pledge of shares agreement and novation of receivables agreement entered between Renuka Energy Resources Holdings (FZE) (RERH) and the third party on Feb 27, 2018.

Renuka had announced on Wednesday its intention to undertake a rights issue of up to 18.8 billion new shares at an issue price of 250 rupiah for each Renuka rights share.

Wilton Resources explained that Indonesian government regulations impose a divestment obligation on PT WI, a foreign investment company in the Republic of Indonesia, holding a mining business licence issued by the Indonesian government for commercial mining to divest its ownership of PT WI gradually such that on the tenth year calculated as of the fifth year from the commencement of the production stage, 51 per cent of the share capital in PT WI is owned by an approved Indonesian entity. 

"The board believes that the proposed restructuring offers more tangible economic benefits to shareholders as it presents a solution to the divestment obligation of PT WI once the group commences commercial production and provides opportunities for future growth if the group decides to acquire more mining concessions," Wilton Resources said in its announcement. 

Wilton Resources said its shareholders will have to approve the proposed restructuring, as it is "akin to both an acquisition of shares in the target on one hand, and a disposal of PT WI on the other hand" and thus constitutes a major transaction as per SGX rules. The proposed deal also requires Renuka to hold an extraordinary general meeting of its shareholders and get approval from its shareholders to perform any of its obligations.