New Documents on SEDAR I hadn’t checked SEDAR for a while and it turns out that on Dec 30 some new documents were filed.
The most interesting (the biggest file) is titled;
“ARRANGEMENT AGREEMENT BETWEEN [Name of Purchaser Redacted] -AND- [Name of Guarantor Redacted] -AND LONG RUN EXPLORATION LTD. December 20, 2015” It is 121 pages full of Legal/Corporate jargon that I have a hard time properly understanding.
A few things did leap out at me;
- The formal offer has to be finalised, filed everywhere required and mailed to the Share and Debenture holders not later than Jan 29
- Meeting to be held no later than Feb 19
** I doubt that these dates are “Wrote In Stone”
There is some interesting stuff beginning on page 20 titled;
“2.6 Treatment of Options and Restricted Awards” wilwal; In the conditions “Parent Company”, “Shanghai Exchange Listing Rules” are mentioned and PRC approvals required among a lot of other stuff;
“PRC Approvals” means: (i) the approval of the Qingdao Provincial Development and Reform Commission; (ii) the approval of the Ministry of Commerce and the State Administration of Foreign Exchange; and (iii) the approval of the China Securities Regulatory Commission, which approval will only be required if Parent Shareholder Approval is required; All that seems to support your theory re the identity of the unnamed purchaser.
**One thing that has occurred to me is the possibility that the “purchaser” may need to raise the money for the transaction. Given that MIE couldn’t raise $200m or even $100m in Hong Kong it could prove to be a challenge for these guys to raise what could be as much as $770m in Shanghai. The major difference between the offers is that this one is for the entire company instead of part of a company with a huge amount of debt still outstanding.
It also looks like these new guys have some “outs” in the conditions if the value of the LRE assets decrease due to increased weakness in the commodity prices.
In SCHEDUAL A page 79 of the PDF which I suspect is the first draft.
PLAN OF ARRANGEMENT UNDER SECTION 193 OF THE BUSINESS CORPORATIONS ACT (ALBERTA) I found this that as a Debenture holder I found interesting;
3.3 Effect of not Receiving the Debentureholder Approval Notwithstanding anything else herein, in circumstances where the Debentureholder Approval is not attained at the Meeting in accordance with the terms of the Interim Order and Purchaser elects, in its sole discretion, to waive satisfaction of the foregoing condition to completion of the Arrangement as provided in section 5.2(i) of the Arrangement Agreement and proceed with the Arrangement without proceeding with the purchase of the Debentures pursuant to the Arrangement, the Arrangement shall proceed, in which case Section 3.1(d), Section 3.2(b), Section 4.1(c), Section 4.2(b) and all other references in this Plan to the Debentures, the Debentureholders, the Debentureholder Consideration, the Debentureholder Indenture, the Debentureholder Letter of Transmittal and the Debentureholder Approval shall be, and be deemed to be, deleted from this Plan I don’t know what to make of this. “Section 5.2 (i) of the Arrangement Agreement” seems to be missing.
To my untrained eye assuming that this is the proposal that gets voted on it appears that if the Shareholders Accept the offer and the Debenture holders don’t the Purchaser can proceed if they wish and deal with the Debenture holders separately. If that’s the case would the “Change of Control” terms in the Debenture Indenture (100% of face value c/w accrued interest) come into effect?
At this point it looks to me like there are a lot of outstanding issues to be sorted out before we see an official offer if we do and if the current proposal gets to a vote there is the potential for some twists and turns.
I think that it’s a bit early for anyone to calculate their gains or losses, we are a long way from a done deal.
As Always; Do Your Own Due Diligence; It’s Your Money !! PS; Our “Allies” in the Middle East “The House of Saud” have begun 2016 with 47 executions. As usual they have told the rest of the world that they will Execute Whoever, For Whatever, Whenever They Like and the rest of the world should “FO And Mind Their Own Business”
Among the executed was Shia cleric Sheikh Nimr al-Nimr who was highly regarded by the Shia and they are to put it mildly less than pleased.
https://www.bbc.com/news/world-middle-east-35213244 Our “House of Saud Allies” are very good at stirring things up and then getting their Allies including us to fight the battles for them.
The tension in the Middle East is increasing daily. The hoped for increase in the Oil price may come sooner than many think or not. There is no way to know how this mess will ultimately play out.