Since the exclusive negotiation period with Indonesian company PT Cakra Mineral Tbk ended in regards to possible acquisition of Cokal Ltd, the ASX-listed company has been pursuing a number of alternative financing opportunities. Cokal, which has coal interests in Indonesia, expects to be able to make a further announcement about the way forward by the end of February.
In a recent announcement Cokal said that while discussions with Cakra were continuing two other alternative transaction proposals had been received which were being actively developed.
Cokal securities were suspended pending clarification by Cakra of its intention to make a fresh takeover offer to acquire all of Cokal’s shares. Cakra’s recent offer closed on November 15, 2015.
Based on various meetings and discussions with Cakra, Cokal stated that Cakra’s earlier offer lapsed due to internal commercial issues which emerged during the offer period. Cakra advised that these issues could be resolved in a timely manner, it was actively taking steps to secure a resolution and that, following resolution, Cakra intended to make a fresh bid.
To date, however, Cakra has not provided any further firm guidance as to timing for resolution of its commercial issues or any fresh bid. Cokal is continuing discussions of a confidential and incomplete nature with Cakra in relation to its capacity and intentions.
Cokal remains open to a transaction involving scrip consideration in an Indonesian listed entity either with Cakra or other parties.
In August 2015 when Cokal obtained its final Indonesian government approval for the BBM mine to proceed, this significantly de-risked Cokal and the BBM project and drew positive interest from a number of potential strategic partners. However, because of the Cakra exclusive negotiation period Cokal was unable to purse any of these until the offer expired.
The company is engaged in active discussions in relation to two potential alternative transactions. The first is a potential merger with an established ASX-listed entity. The entity has an experienced Board and management and has conducted technical due diligence investigations of Cokal including site visits and advised
Cokal that its diligence enquiries have substantially been completed.
The entity has advised Cokal that there is a key bid pre-condition, which is not within Cokal’s control, and that subject to satisfaction of that condition, it is willing to quickly progress the proposal to finality. It has been indicated to Cokal that this could occur as early as within four weeks.
Cokal has also engaged with BM Intelligence in Guangzhou, China. BM is a very successful Hong Kong and China based financial services provider, servicing more than 800 listed company clients and has a very strong and accomplished IPO consultancy arm, particularly in China. They have assisted more than 80 companies with successfully listings.
The interest from BM Intelligence has arisen particularly now that Indonesia has recently become a prime country for Chinese foreign investment.
The preferred structure proposed to Cokal involves Cokal floating its immediate Singapore subsidiary, Cokal Holdings Pte-Ltd through a Cokal owned Chinese subsidiary, on the Shanghai exchange to raise US$50 million to $100 million.
Cokal Holdings Pte Ltd ultimately holds all Cokal interests in Indonesia. The percentage ownership retained by Cokal will depend on the final pricing but it is Cokal’s aim to retain a majority percentage of Cokal Holdings Pte-Ltd.
The company says the Board is open to other proposals and will actively evaluate and assess them as they arise including a combination of the above funding strategies to provide the best result for shareholders.