Molyneux scraps plan to buy Blumont shares
No reason provided; canned deal is fresh blow for firm
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No reason provided; canned deal is fresh blow for firm
Anita Gabriel
09 April 2014
Mining investor Alexander Molyneux dropped plans to buy a stake in Blumont Group yesterday, six months after he stepped into the spotlight to defend the resource firm’s prospects amid a massive beating suffered by its shares.
No reason was provided in the announcement to the Singapore Exchange, but Blumont said the 39-year-old Hong Kong-based investor remains as a consultant and key adviser.
It said he had planned to buy 135 million shares, which would have given him a 5.2 per cent stake in the firm. Of the 135 million, 95 million were from Blumont executive chairman Neo Kim Hock and 40 million, from another investor.
The development is a major setback for the firm, which only a week ago disclosed that Singapore’s Commercial Affairs Department (CAD) was probing two of its key executives for possible breaches of securities laws.
Mr Molyneux’s position as chairman-designate, a post he was appointed to last Oct 7 after he had proposed to acquire Blumont shares at an indicative price of 40 cents a piece, is now under review.
Blumont said: “The nominating committee will consider the latest development and seek to meet Mr Molyneux to make a decision regarding his position as chairman-designate as soon as possible.”
There were already signs that the deal for Mr Molyneux to buy Blumont shares - viewed last year as a vote of confidence for the firm rattled by the stock price plunge - was wobbly.
The plan, originally meant to be a done deal by last November, was deferred twice, and discussions had been long-drawn-out.
In early February, Blumont said Mr Molyneux was still in talks to settle “certain technical issues”, hence the deferment of his acquisition.
The Blumont counter, which has been under selling pressure of late, closed unchanged yesterday at a low of 4.1 cents. It has lost more than 30 per cent since last Monday.
Last week, the CAD pushed Blumont’s wholly-owned G1 Investments for all information and data belonging to Mr Neo and executive director James Hong Gee Ho from January 2011 to date. Singapore’s white-collar crime buster is probing into possible trading irregularities in the shares of the battered trio - Blumont, Asiasons Capital and LionGold Corp.
Mr Molyneux, a former chief executive of SouthGobi Resources and chairman of Blumont’s investee companies Azarga Resources and Celsius Coal, had emerged at a press briefing last year armed with plans to buy Blumont shares.
This came a few days after the three penny stocks collapsed in early October, which led to SGX’s unprecedented move to suspend and, later, designate them.
Many perceived the deal involving Mr Molyneux as partly aimed at soothing frayed investor nerves. For a short while, it worked: in the ensuing days, Blumont’s share price held up better than those of its two counterparts, although it didn’t last long.
Mr Molyneux had made a case for Blumont as a company fast on its way to being Asia’s natural resources champion. “With the unusual share price drop, this is the right time to get involved,” he had said.
Now, the canned deal has dealt another blow for Blumont, which has been struggling to stay on its business course and has not even been able to find a replacement independent director for its board. Last Friday, the firm sought more time from SGX to do so.