FINANCIAL REVIEW TODAY - Another excerpt only.Miners that...

FINANCIAL REVIEW TODAY - Another excerpt only.

Miners that haven’t:

While we are on the subject of miners and mines that have never quite got there, Flinders Mines has confirmed May 8 as the date of its already decided showdown with owners agitated by the company’s progress to delisting. A bunch of minority owners forced a 249D notice on Flinders on March 13 after winning but losing a Takeovers Panel challenge of their board’s plan to enter the netherworld of unlisted companies.The panel deemed the original ASX-approved delisting proposal unacceptable but then accepted a package of changes offered by Flinders that effectively left the minorities where they were. That is, pending a new ASX approval, the company they own will be delisted and what little liquidity there was in their stock will almost totally evaporate.As we reported a couple of weeks back, the 249D aims to retrench chairman Neil Warburton and two other directors associated with New Zealand’s uber-shy Todd Corporation. The Kiwis own better than 55 per cent of the business and Flinders has plans to make a pre-delisting buy-back that would increase Todd’s ownership to more than 60 per cent.Todd has pretty much kept Flinders alive since it started investing in the West Pilbara iron ore play in 2014. Since then Todd has become Flinders’ major owner and creditor and by far the biggest owner of the separate port and rail project that is needed to get the stalled junior’s iron ore to customers. Illiquidity and a more general failure of market support for Flinders were listed as two of the core reasons for the board’s decision to leave the public markets. Both are claims justified by the facts.

Why Flinders wants to disappear:

Nearly 80 per cent of the business is owned by two shareholders and only 2.16 per cent of Flinders shares were traded through 2018 and pretty much no owner but Todd Corporation has taken up their full entitlements in any of the three rights issues made over the past two years. Collectively those raisings have fallen 28 per cent shy of the possible target.Interestingly, in a market missive released just before Christmas, Flinders also claimed that delisting would allow the company greater access to funding. Shareholders were told that the “unlisted environment” was preferred by private equity and “Asian and Middle Eastern investors” because of “increased structural flexibility, removal of ongoing costs associated with an illiquid listed company and reduced administration burden”.Not surprisingly, that did not cut the mustard with what appears to be a highly motivated and angry cohort of minority owners. If the hostility of the social media war in Flinders and Todd is matched by those who have been called to the Freshwater Room of Perth Hyatt Regency, then certain victory for the incumbent board will come at some cost.Oh, and why is victory certain? Well because, not surprisingly, the Todd Corporation is backing its board.End of story.