Big Banc Split Corp T.BNK

Why BNK trading at discount: understand the structure

[terryshan]

Did a little digging and finally understood the big picture of the transaction structure:

Essentially, a shanghai based firm "Xinke" has the right to acquire BNK, but can only do so if BNK is taken private. Xinke is also in talks to acquire a JV (Yargeo, 51% owned by Novatek and 49% by Fund Energy for the Yarudeyskoye oil field (9,700boe/d capacity) ).

Geo-Jade is trying to buy Xinke for roughly $1.27 billion via share issuance. This allows Geo-Jade to acquire BNK and Yargeo. To raise the cash for the BNK and Yargeo acquisition, Geo-Jade then needs to raise cash from the institutional investors that owned Xinke, which would own part of Geo-Jade after the said Xinke acquisition.

So what's the problem? Based on the offering memo filed by Geo-Jade on March 21. The proposed acquisition of Xinke and cash raise have not been finalized. There is no indication that Xinke owners have agreed to the takeover price and neither do we have any assurance that after the Xinke acquisition, Xinke institutional investors will pony up roughly $1.1 billion in cash to fund BNK and Yargeo purchase. 

I can't understand how a investment vehicle formed in 2015 (Xinke) is worth $1.27 billion... just feel fishy to me 


https://europe.chinadaily.com.cn/business/2016-03/22/content_24009424.htm

[glock]

good post.....management said they been working on this for a year... i hope they were smart enough to do their own dd on how the transaction will proceed....cause they just let everyone know how much they are willig to sell for:(

[Mulaman1]

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[Johnny41]

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[Mulaman1]

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[Johnny41]

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[Mulaman1]

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