Golden Energy and Resources (GEAR) has entered into a share purchase agreement (SPA) with Ascend Global Investment Fund SPC – ADSP (Ascend Global), where GEAR will sell 264.7 million shares, representing a 4.5% stake in PT Golden Energy Mines Tbk. (GEMS) for a consideration of US$50 million ($67.1 million).
Following the transaction, GEAR’s total shares in GEMS will decrease from 67% to 62.5%.
GEMS is an Indonesian company listed on the IDX, and is in the business of mining and trading of energy coal from its concession in Indonesia.
As at March 12, GEMS has an issued and paid-up capital of 588.24 billion rupiah ($55 million) comprising 5.88 trillion shares with a nominal value of 100 rupiah per share.
The trading of GEMS shares has been suspended on the IDX since Jan 31, 2018 pending its compliance with the minimum 7.5% free float requirement.
The audited net asset value (NAV) and audited net tangible asset (NTA) value of the GEMS sale shares is about US$15.7 million and US$7.6 million respectively as at Dec 31, 2020.
The market value of the GEMS sale shares is approximately US$46.9 million, based on the last traded price of the GEMS Shares of 2,550 rupiah per share before its trading suspension.
Based on the consideration, the excess of the proceeds from the transaction over the audited book value of the GEMS sale shares as at Dec 31, 2020, is at US$34.3 million.
On a group basis, the GEAR group will record a loss on disposal of about US$0.8 million based on the US$5.7 million net profit attributable to the GEMS sale shares.
Ascend Global is a Singapore-incorporated company registered with the Monetary Authority of Singapore (MAS) as a licensed fund management company.
Ascend Global is GEAR’s joint venture (JV) partner in Golden Investments Australia.
Completion of the transaction is subject to the consent of the holders of the 9% senior secured notes due 2023.
Completion is expected to take place on March 30. The agreement will lapse should the completion not occur by 5pm, 30 days after the agreement.
The transaction, according to GEAR, is to enable GEMS to meet the Free Float Requirement and resume trading of GEMS shares on the IDX.
Shares in GEAR closed flat at 15.5 cents on March 12.
