Wealth Mining Pty Ltd announced an off-market all-cash takeover offer to purchase all remaining outstanding ordinary shares of Carabella Resources Limited.
User: Cultural Collections, University of Newcastle
Wealth Mining is a wholly owned subsidiary of China Kingho Energy Group which is one of the largest private mining and energy companies in China with substantial expertise in the coal mining industry.
A report on the Business Spectator reveals that Kingho Energy Group plans on investing $900 million into developing the projects of Carabella.
According to the ASX announcement, Wealth Mining already owns a substantial percentage of Carabella’s shares and is entitled to a A$ 0.42 per share.
“We are pleased to announce this very attractive all-cash Offer for 100% of the shares in Carabella,” said Mr. Qinghua Huo, Chairman of Kingho.
“We wish to acquire Carabella as an important first step in Kingho’s strategy to develop an Australian headquarters for our global resources and development businesses outside of China. We believe that our Offer provides compelling and certain value for Carabella shareholders at a time when there is significant illiquidity in Carabella’s shares and uncertainty over the funding and development pathway for Carabella’s assets.”
A confidential, non-binding proposal similar to the Offer has been submitted by Wealth Mining to the Carabella Chairman initiating various discussions, but no satisfactory response has been given to the request.
The Offer is set to be open on or about 19 December 2013 and closed on or about 20 January, 2014.
Key reasons why Carabella should accept Wealth Mining’s Offer include:
– The Offer is a substantial premium to Carabella’s recent trading price and an attractive exit opportunity for Carabella shareholders.
– The Offer provides certainty of cash value to Carabella shareholders.
– Carabella shareholders will no longer be exposed to risks and uncertainties.
As far as funding is concerned, the needed cash for funding the Offer will be sourced from available cash reserves and capital support from Kingho.
According to Dennis Shen, Chief investment officer of Kingho, Australia was pinpointed as the ideal place to set up the global operation due to its strong resource-based economy, sound regulatory, financial and legal framework.
Kingho’s headquarters in Sydney will control all non-China assets including coking coal assets in Sierra Leone, Mozambique and Kazakhstan.
Wealth Mining has the approval from the National Development and Reform Commission of the People’s Republic of China as well as the approval from the Chinese Ministry of Commerce and the Chinese State Administration of Foreign Exchange.
