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WEC - White Energy Company

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Hi Quillan,

Have you received any clarification on the subscription rights for non-Aussie/Kiwi shareholders of SACL? Will those receive subscription right or any compensation?
 
Hi Inquisitor, and Noirua.
Firstly it is always a pleasure to find Noirua is mistaken.
A pleasure because it is a rarity !!
The fact he caused me a sleepless night or two will be forgiven.
I took this matter up with the ASX, who referred it to WEC.
ASX said WEC was in compliance with issuing Rules.
I then took it up with WEC particularly because of the content
of the 19th April release.
Here is part of what I wrote to them

"The Document sent out by SACL, of 19th April made
it quite clear that the offer would be open to all
shareholders.
It was posted to my registered address in Malta..
It makes no mention of exceptions.
It mentions "if 100% of shareholders accept"--
That would have to include me, and all the other
overseas holders of SACL. It also says that the
entitlement of SACL Shareholders
"would value SACL at $39.3m".
My maths says that 0.1996 x 197million shares = $39.3m
That implies with no uncertainty that it includes
100% of Shareholders.
Please confirm this is the case."

I have this morning received a reply from WEC, in which they state that I will be entitled to participate in all the terms of the bid for SACL by WEC subject to confirmation from the Malta Authorities that there is no restriction on Malta Residents from participating in overseas investments.

I have written to the Malta Stock Exchange today asking for clearance, which is of course mandatory, since EU Law permits citizens to invest their money wherever they wish, and there are no currency movement restrictions in place in Malta. Of course there is always a possibility of restrictions in the future, after the Greek and othe PIIG countries' problems.

In my reply to WEC today I told them I would be passing on confirmation from the Malta Stock Exchange that there were no restrictions on foreign share ownership, and that this applied to all 27 EU countries in which there is free movement of capital Therefore is such clearance really necessary from each individual SACL shareholder living within the EU?
I hope this is helpful
 
Hi Quillan et al, It does now seem certain that WEC are not having a rights issue that would include shareholders of South Australian Coal (SAC). This now seems to be a subscription of WEC shares made as part of the alternative offer.
The cash offer is only up to $10 million so it is incorrect to say that the offer is worth around $39 million; as that much cash is not available.
The alternative offer does say that it is up to individuals to check their position as to whether they may legally take part in the offer.
Most shareholders are in Australia, NZ and UK., so only USA investors could have problems with a subscription offer.

I haven't come across subscription shares before as part of a takeover bid. So any comments I made would have been in ignorance of this possibilty and only made on the basis of a rights issue as we discussed.

The offer requires 90% of shareholders to be in favour (SAC) after approval of WEC shareholders. This would have been 75% if WEC had decided to make a court order regarding the off-market bid.

I notice that Western Plains Resources (WPG) in their ASX announcement yesterday mentioned the Phillipson Deposit as still not having had mining rights approved yet. Their area in which they have rights is 'Penhryn', previously drilled by Auiron Energy (Felix Resources) that has no such problems. WPG also have mining rights over Hawks Nest and Peculiar Knob for iron Ore.

The other parts of the Meekatharra are owned for mining rights by the UKs Altona Energy AIM:ANR except East Wintinna where Linc Energy ASX:LNC have mining rights.

Flinders Power Partnership may still have rights over part of the Phillipson Areas at Ingomar.
 
Thank you for your answer, Quillan.

I finally brought myself to read the bidder's and target's statement, in the latter of which I found the following confusing information on page 25, question 39:
39. What if I am a foreign SAC Shareholder?
If your address, as it appears in SAC’s register of members at close of
business on 7 June 2010, is in a jurisdiction other than Australia, its external
territories, or the Netherlands, you are an Ineligible Foreign SAC Shareholder.
However, you will not be an Ineligible Foreign SAC Shareholder if the Bidder is
satisfied, in its sole discretion, that it is not unlawful, not unduly onerous and
not unduly impracticable to make the Offer to you in the relevant jurisdiction
and to issue White Energy shares to you on acceptance of the Offer, and that
it is not unlawful for you to accept the Offer in such circumstances in the
relevant jurisdiction.
In its Bidder’s Statement, the Bidder has stated that SAC Shareholders who
are Ineligible Foreign SAC Shareholders will not be entitled to receive the
Share Alternative as consideration for their SAC Shares pursuant to the Offer,
unless the Bidder otherwise determines in its absolute discretion.
Instead, if you accept the Offer and receive the Share Alternative in respect
of some or all of your SAC Shares, the White Energy Ordinary Shares, the
White Energy Performance Shares and the White Energy Subscription
Rights that would otherwise have been received by you will be provided to a
nominee approved by ASIC who will sell those shares and rights (together
with the White Energy Ordinary Shares, the White Energy Performance
Shares and the White Energy Subscription Rights that would otherwise have
been received by other Ineligible Foreign SAC Shareholders). You will receive
your pro-rata share of the net cash sale proceeds of such sales.
Ineligible Foreign SAC Shareholders who accept the Offer and receive
the Cash Alternative for some or all of their SAC Shares, will receive cash
consideration under the Offer in accordance with section 12.3 of the Bidder’s
Statement.
See sections 11.10 and 12.9 of the Bidder’s Statement for further information.
Click to expand...

It seems like it very much depends on the legal situation in each shareholder's country, whether you'll receive shares and subscription rights or compensation in cash.
 
Hi Noirua and worried overseas holders of SACL shares.In Noirua's posts #12 and 13, he is adamant that the Rights offer or whatever it might be known as, will not be open to overseas holders of SACL.
The Malta Stock Exchange has cleared the right of any citizen to invest overseas, in accordance with the rights of all EU citizens
WEC should have known this and not made me and others have to go through the laborious task of getting local Civil Servants off their backsides to answer a simple question. I had to threaten referral to a higher authority, which produced the confirmation by return of post.
This I passed on to WEC, who have now sent me the Prospectus and the Form to accept the Offer, for return to Computershare.
As I have pointed out before, SACL and WEC have referred to "100% acceptances" which must include all SACL shareholders, together with their right to subscribe to the Rights Issue.There is no caveat or suggested exclusion of any group of shareholders, provided their jurisdiction permits such investments. As I read it WEC could exclude overseas holders, but has chosen not to.
WEC would not be asking for confirmation of my rights to accept the offer, which is a share swap. I assume therefore their purpose was to clear the right I have to participate in the Rights Issue.
I commented recently on the valuations of coal in the ground of other Australian explorers/developers. I have found figures ranging from 18 cents a tonne to over 30 cents, with implied reserves of up to 650mt.
Since Phillipson coal will be of similar thermal quality to bituminous coals I would have thought it should be in the same ball park.
At 25 cents it would value 1.5bn tonnes at A$375m, but the reserve could be
larger.Of course it is only worth this kind of valuation to a Company like WEC
which has the technology to create value from the coal, but it does suggest to me what a good deal it is for both Companies.
 
White Energy (WEC) have announced that they have received acceptances for 71.88% of the shares in South Australian Coal (SAC) as at 5/7/2010. The offer closes, unless extended, on 21.7/2010. Just 2% are for the cash offer and 98% for the share alternative.

The offer is off-market as SAC are a private company and all shareholders are 'Issuer Sponsored'.
 
Looking at a similar share, Altona Resources, a valuation for coal in the ground at Phillipson is in the region of 3c per tonne. Reserves are around 4 billion tonnes, putting an eventual value on SAC, looking forward, of $120 million. Taking into account risk from Woomera to coal prices at around 75% this values SAC at $30 million plus $10 million in cash = 22c a share, as of now.

The valuation by WEC looks fair enough, afterall, there has to be something in it for them as well.
 
WEC have declared their takeover bid for South Australian Coal SAC as unconditional with over 97% of shareholders accepting the offer.

Those accepting cash will have it sent to them on 11th August 2010.

Those accepting shares will also have details sent to them on 11th August together with details on acceptance of the Subscription Rights. Final day for acceptance is 20th October 2010.

Last day for issue of subscription rights is 27th October 2010.

All of the above is part of the takeover bid.
 
SAC South Australian Coal shareholders have now received their cash or shares in WEC (Issuer sponsored holding); included are performance shares for 2010 and 2011
Those who took up the shares offer are entitled to buy further shares in WEC, details were enclosed. The sum sent must be drawn on an Australian Bank, or a subsidiary branch of a foreign bank, based in Australia.
( the reason for this is, that foreign cheques take up to 60 days to clear in Australia, one of the slowest clearing systems )
 
noirua said:
SAC South Australian Coal shareholders have now received their cash or shares in WEC (Issuer sponsored holding); included are performance shares for 2010 and 2011
Those who took up the shares offer are entitled to buy further shares in WEC, details were enclosed. The sum sent must be drawn on an Australian Bank, or a subsidiary branch of a foreign bank, based in Australia.
( the reason for this is, that foreign cheques take up to 60 days to clear in Australia, one of the slowest clearing systems )
Click to expand...

Hey noirua, I read your comments on coal businesses with interest.

I held shares in FLX/SAC and now as a result have a very small interest in WEC. I have also received an offer from WEC for Subscription Rights at $2.50 expiring 22/10/2010.

I will probably take up this offer, but is it possible to apply for more shares above my entitlement?

Also my entitlement seems to be about 2.6 times the number of WEC shares I was issued. I checked WEC's announcements, but unless I missed something, I can't find any explanation of how the number of Subscription Rights was calculated.

Also, are the Subscription Rights tradeable before 22/10/2010?

Also, where do I find information on the performance shares for 2010 and 2011?

Many thanks for any further insights.:)
 
Hi YELNATS, Because the subscription rights in WEC will be 'issuer sponsored' they are not tradeable. If you fail to take up your rights they will NOT be sold and you get nothing.
Shares in SAC were for a private company and issuer sponsored. Foreign holders had a big problem (especially United States, Canada, UK, Germany and Republic of Ireland) with taking up the rights as well as performance shares.
You can't apply for extra shares though you can apply for less. No extra shares as foreign holders could be exempted from the whole issue.

Mr Hans Mende and AMCI are American and that may be the reason things are fashioned this way, and I believe former Felix Resources directors took up a form of placing to make a level playing field in this matter.

Basically, Felix Resources was 30% foreign owned and therefore SAC as well.

You receive 2034 shares in WEC for every 10,000 shares in SAC.
 
Are WEC the equivalent of the old Woodside Lakes Entrance Oils of the 1960's with all to play for. Coal not oil, and represented in Australia, China, Indonesia, South Africa and the USA. Loads to go for and well cashed up with placings, over $250 million.
Of course the stock price is not cheap and recently many have clocked on to the share as it entered the ASX200.
Looks to be South Australia's big promise along with CNOOC and Altona Energy's Meekatharra diesel from coal region. [LNC and WPG also have interests in the region through East Wintinna and Penhryn]
 
WEC closed at an all-time high of $3.89 on the appointment of Felix Resources' former directors to the board of White Energy Limited.
 
noirua said:
WEC closed at an all-time high of $3.89 on the appointment of Felix Resources' former directors to the board of White Energy Limited.
Click to expand...

I listened to a presentation from the outgoing MD of White Energy Co (name escapes me at present) at the Cutting Edge series of the Melbourne Mining Club last night. He made much of the appointment to the board of White Energy of the ex-Felix Resources board members.
 
McCoy Pauley said:
I listened to a presentation from the outgoing MD of White Energy Co (name escapes me at present) at the Cutting Edge series of the Melbourne Mining Club last night. He made much of the appointment to the board of White Energy of the ex-Felix Resources board members.
Click to expand...

Felix Resources came up from 38c a share to $23.30 at its peak, before being taken over by Yanzhou Coal. Directors Travis Duncan, Brian Flannery and Hans Mende are billionaires with Hans Mende's AMCI the largest thermal coal export company in the USA. All have strong links with China and Hans Mende in the States.
 
Considering the fact Felix having had a mining capacity of ~20Mtpa when they were taken over for A$ 3.3 billion last year, I don't even dare thinking about what will happen when the super cycle in the global coal market gains some momentum and WEC starts rolling out dozens of BCB-modules around the world. Against the background of the large number of enquiries regarding potential further joint ventures Southern Cross' estimate (which is based soley on existing JVs) of a target capacity of 45Mtpa over the next five years leading to a share price of A$ 17.85 seems rather conservative. With a couple new JVs WEC could one day rank among the top five coal producers in the world and so may do their market capitalization.
 

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