CKA 3.23% 9.0¢ cokal limited

Ann: Notice of Extraordinary General Meeting/Proxy Form, page-10

  1. 165 Posts.
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    Hi all,

    Have read some good comments above. I agree with all. Plenty of problems in this deal. Poacher and game keeper written all over it.

    Apart from internal governance issues, the premise of the deal i.e. the ‘benefit to SH’ on which the independent expert bases the “fair” classification is … IMO … something that SH don’t actually need… let alone should be willing to pay for. Here are some reflections;

    Does CKA really need the cashflow support from ICT (as proposed) in the current sales environment? Plenty of undrawn funds available (as far as I can see) to pump prime first operations. Once the first two months are done, significant operating cash-flows will accrue and easily be enough to draw on to cover working capital. IMO the deal offers CKA something it does not need, plus asks for a long term payment obligation, with plus no timed break clauses (or review and extension mechanisms) on an 8yr exclusive sales agent agreement (Ahana) who sits on both sides of the deal.

    In addition to the pricing mechanism concerns already mentioned by others, ICT also becomes an ‘end user’. The terms seem to permit ‘end users’ to alter the coal specifications. So what … well if this EGM vote passes, how will Ahana exclude itself from ongoing conflict of interest issues each month/quarter in production vs sales decisions. Ahana sit on the Board of BBM and ICT (the expert report does not state this direct and ongoing conflict). We may need some assurances re: governance and separation of duties to ensure snouts don’t go into the trough.

    These are also the same crew who cannot seem to place commercial common sense above ego and arrogance. The oversight of the road has been poor and the wealth destruction from schoolboy errors is phenomenal. And these individuals now want blessing to lock in exclusivity over both sides of the BBM deal. Last time I was robbed they had masks on!! Yikes.

    IMO this has hairs all over it. I’ll be happy to chat more but want to re-read over the weekend to collect my thoughts.

    … but otherwise I enjoy reading the banter.

    AM74
 
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