Blumont ‘could have attracted international interest’

In its second reply to a Singapore Exchange (SGX) query on the sharp rise of its share price since the beginning of the year, Blumont Group said its recent flurry of activities could have attracted international interest in its stock.

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Blumont ‘could have attracted international interest’

Cai Haoxiang
03 October 2013

In its second reply to a Singapore Exchange (SGX) query on the sharp rise of its share price since the beginning of the year, Blumont Group said its recent flurry of activities could have attracted international interest in its stock.

The sterilisation services firm, which had been expanding into the mineral and resources sector since the end of last year, said it had been approached by “global financial parties, including an international fund management firm”.

The latter had expressed interest in investing in the company through a private placement, and discussions are ongoing, Blumont said, adding that it had in the past five months held discussions with over 20 additional potential acquisition targets and joint venture partners, most of which are listed firms.

“Some of these negotiations are in an advanced stage, and the company expects the imminent announcements of some of these deals. Such negotiations have included different investment bankers, legal advisors and technical consultants representing the company and the prospects of interest, in different parts of the world.”

In the last nine months, Blumont’s share price had risen from an adjusted 20 cents at end-2012 to close on Monday at an eye-popping historical high of $2.45.

The spectacular rise triggered an unusually detailed query from SGX on Tuesday about the company’s share trading activity. SGX noted that Blumont had made mostly small investments of under A$/US$10 million, and the shares rose even amid the company’s recent one-for-two rights issue at five cents a share.

Blumont reiterated its compliance with listing rules. Yesterday, it appended a list of various investments in iron ore, coal, gold, uranium and copper in the last 10 months.

It said its strategic partners are recognised industry leaders in their fields, and “the market has found comfort in this prudent investment approach”.

“Blumont is not alone in its recognition of the unprecedented opportunity resulting from the recent severe impairment of asset prices in the mineral resources sector,” it said, citing former CEO of mining company Xstrata, Mick Davis, raising US$1 billion earlier this week from SGX-listed Noble Group and private equity fund TPG Capital to start a resources company.

Blumont closed at $2.39 yesterday, down 5 cents, on a volume of 29.9 million shares traded.

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