Troubled LionGold banking on Daim Zainuddin’s son
Wira Dani Abdul Daim is exec deputy chairman as well as exec director of firm
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Wira Dani Abdul Daim is exec deputy chairman as well as exec director of firm
Anita Gabriel
02 April 2014
Beleaguered gold miner LionGold made a string of announcements on Monday pertaining to board changes and its plans to raise close to $40 million through the issue of shares and bonds.
But the announcement that would have piqued curiosity was the appointment of Wira Dani Abdul Daim, the son of Malaysia’s former finance minister Daim Zainuddin, as executive director in the firm.
In early October last year, when LionGold shares were savaged, wiping out hundreds of millions in market value, the 36-year-old had had some 15 million shares in LionGold force-sold by banks.
This was somewhat perplexing from the onset, partly also because his father is still perceived to wield significant clout in Malaysian politics and holds sizeable business interests abroad.
As a result of the forced selling, Mr Wira’s direct interests in the Singapore-listed junior gold miner went from 1.8 per cent to 0.15 per cent; his stake was bumped up to 0.2 per cent in January this year due to share options.
He retains a 4.5 per cent deemed interest in LionGold through Venaton Holdings, which is wholly-owned by ISR Capital.
In a response to queries from The Business Times, LionGold said: “In spite of the unfortunate events which led up to the forced selling of his shares, Datuk Wira remains positive on the prospects of LionGold’s business.”
LionGold added that he has also been appointed executive deputy chairman.
Interestingly, also on Monday, ISR Capital, a firm majority-owned by private equity firm Asiasons Capital - one of the trio hammered in the October saga - announced that Mr Wira had been redesignated as non-executive chairman and non-executive director, effective that day.
Asiasons joint managing director Jared Lim had last year said that the firm, which also owns 8 per cent of LionGold, plans to divest its holdings in ISR.
Mr Wira Dani emerged as substantial shareholder in ISR in 2012 - before December 2012, the firm was known as Asiasons WFG Financial - with the hope of restructuring and lifting the firm’s waning financial position with new businesses.
In financial year 2013, ISR suffered a loss of $43.27 million from a $50 million impairment loss due to a significant decline in the fair values of quoted and unquoted investments.
Now, the concurrent moves involving Mr Wira in ISR and LionGold, both of which have Asiasons as a common shareholder, are an indication that the Malaysian businessman with interests in the power and coal sectors is being banked on to revive LionGold’s sagging financials.
Referring to Mr Wira’s resignation from ISR as executive director and his redesignation, LionGold told BT: “Henceforth, Datuk Wira does not hold executive positions on other boards and will focus his efforts on LionGold’s operations.”
The firm added: “He is currently formulating his plan for LionGold and, over time, as he assimilates with the group’s day-to-day operations, he will be in a position to further comment on his ideas and strategies.”
In another change, LionGold announced the resignation of Nicholas Ng as director and chief executive officer, citing medical reasons; this was largely expected, given that Mr Ng has been on medical leave.
Executive director Raymond Tan Soo Khoon will continue in his post as acting chief executive.
The sense of urgency to fortify the firm’s business is hard to miss: The shine has come off LionGold, which, at its peak last August, had a market value of $1.6 billion, despite being in the red. Investors swooned at the sweet prospects of the company, which was aggressively picking up mining assets to reinvent itself.
Then, October happened and LionGold’s shares were pummelled; what was once a gilded stock soon became a trade-with-extreme caution counter. Its market value stands at a humbling $154 million.
The exercise will raise $5 million.
The firm also plans to issue two tranches of unsecured redeemable convertible bonds due in 2017: The first tranche, involving $15 million, will be subscribed by two private investors, Awang Ahmad Sah and Vigneswaran Subramaniam; LionGold’s non-executive chairman Nik Ibrahim Kamil will subscribe to the second tranche of bond issues with a principal amount of $20 million.
Both bonds, which carry a 5 per cent a year interest rate, can be converted to shares at 16 cents a piece.
After the issue of subscription shares and full conversion of bonds into shares, LionGold’s consolidated net tangible asset per share will fall to 25.13 cents from 27.49 cents as at end March 2013. Consolidated loss per share will change to 0.73 cents from 0.94 cents.
LionGold’s shares finished 0.7 per cent lower at 14.9 cents yesterday. On Monday, the day of the announcement, the shares rose nearly 7 per cent.
The counter has gained some ground since its low of 9.1 cents on March 6. However, it is nowhere close to its dizzying peak of $1.725 last August.
In the meantime, the aftermath of October continues to be felt.
Quah Su-ling, executive director of Ipco International and one of several parties involved in lawsuits linked to the forced selling of LionGold shares, was recently ordered by the High Court to pay up a $1.83 million debt to the Bank of East Asia owed from a share-margin facility, The Straits Times reported. Her lawyer had argued that it was difficult for her to pay up because her assets have been frozen as a result of the lawsuits.