Sias-Golden Energy align to find better exit option for shareholders

Sias, also known as the Security Investors Association (Singapore), has recently initiated discussions with senior officials from Gear (Golden Energy and Research), to encourage the firm to improve it privatization offers for its shareholders.

There have been several reasons cited for the same, include cash holding of GEAR, and the preference of shareholders for all-cash buyouts. Sias president and chief executive David Gerald recently met with GEAR executive director Mark Zhou. According to their discussions, if GEAR is committed to privatization, then it would be beneficial to increase its exit offer from the existing 16 cents to something more significant, and carry on with its strategic reorganization.

 Mr. Gerald also commented that since the company generated a positive cash flow but did not declare any dividends, it could stand to be more generous. In response to this GEAR stated that the company needed to keep its funds for mergers and acquisition, he added.

 Most of the shareholders prefers cash option, since the comparison of the distribution of Gems should not be compared with the privatization of GEAR. As different transactions, they should be looked upon independently with the board being advised to manage the processes accordingly.

The Singapore Exchange Regulation advised Gear’s board to make sure that W Capital, its independent financial adviser, pays attention to whether the valuation method is right and identify assumptions that can withstand scrutiny.  .

The extended period of April 9 to August 9 2023, will allow the board and the management to explain the reasons for their offer. It will also help in getting more information to the shareholders so that they can assess their merits and take into consideration various other options. The next meeting is to be held on July 9, 2023 as an extension of requirements to obtain shareholder approval.

Source Credit: https://www.straitstimes.com/business/sias-meets-golden-energy-directors-to-urge-better-exit-deal-for-shareholders