The placement, which is conditional on completion of a restructuring and is subject to shareholder approval, follows due diligence by SPG, culminating in a physical inspection of Guildford’s BNU coking coal mine in Mongolia.
“This showcased Guildford’s ability to develop and operate a world-class coking coal mine in the South Gobi desert and to produce a high quality hard coking coal product in close proximity to a large number of Chinese steel makers,” Guildford said.
“Whilst the agreed price is at a discount to Guildford’s current share price, it is the board’s view that this should be seen as a significant and strategic opportunity for the company to secure a very large and well connected Chinese group on the share register to support the expansion of coking coal operations in Mongolia and in particular through the expansion of the market for the BNU hard coking coal in China and through pulling costs out of the supply chain to Chinese end users.”
SPG is part of a group of companies controlled by David Wang, who is the chairman of Greenland Hong Kong Holdings, which was formerly known as SPG Land.
This entity was listed on the Hong Kong Stock Exchange in October 2006 and was involved in real estate projects over 10 cities in China.
Wang is the founder of SPG Land and was the chairman of this group, engaging in real estate development, property investment, hotel investment and related business in China.
SPG Land changed its name to Greenland HK in August 2013.
Wang has over 20 years of experience in finance, construction, property development and investment.
He graduated from South China University of Technology with a Bachelor degree in Building Materials and University of Technology, Sydney (Australia) with a Bachelor degree in Commerce and now holds an Australian passport.
“Through Mr Wang’s extensive business success he has created a strong network in China in the coal and steel sectors with both private and state owned entities,” Guildford said.
One of the key elements of the comprehensive debt restructuring plan being pursued by the Guildford involves a $US115 million five year interest-only listed bond.
“The structure contemplated should give the company significantly greater flexibility to manage its cash flows going forward and enable the implementation of the growth strategy,” it said.
“The company has made significant progress towards the completion of this restructure and
will update the market when it has been finalised.”
Guildford continues to investigate the merits and mechanisms for a potential listing (dual and/or sole) on an Asian stock exchange. This was a crucial recommendation flowing from the 2015 strategic review of the company, it said.
