"Which also raises a regulatory question. If someone had asked me what HAV's "main undertaking" was 12 months ago, I definitely would have said "Kalkaroo". If someone asked me now, I'd be tempted to say "Grants Iron Ore Basin".
The question is important because it is my understanding that a company cannot dispose of its "main undertaking" without a shareholder vote" @chrisCarter
I had come to a similar conclusion last year, because iron ore dwarfs everything else HAV has in revenue generating terms - especially at current spot metal prices. That is why I always refer to them as 'core' assets.
Unfortunately, HAV Management kept referring to the iron ore as 'non-core' assets during the last calendar year in meetings and presentations. Some people I know think this was deliberate, so that they could avoid any Havilah Shareholder vote under ASX Listing Rules if they did dispose of the iron ore assets.
Havilah Shareholders should keep
ASX Listing Rule 11.4 (
‘Disposal of a Major Asset Involving an Entity to be Listed') in mind and the statement below by Mr Sanjeev Gupta in the Australian Mining Review article from November 2018, if Havilah undertakes a transaction with GFG and/or SIMEC Mining with respect to any of Havilah’s iron ore assets:
http://australianminingreview.com.au/gfg-alliance-blaze-a-trail/
As stated in the above Australian Mining Review article from November 2018:
“The next phase of Sanjeev’s Whyalla expansion was a listing on the Australian Securities Exchange (ASX)” [quote under sub-heading ‘Transforming Whyalla’]
Based on that statement by Mr Sanjeev Gupta, I reviewed
ASX Listing Rule 11.4 (
‘Disposal of a Major Asset Involving an Entity to be Listed'). In my opinion,
any transaction with GFG and/or SIMEC Mining should require Havilah Shareholder approval to be a condition built into any final agreement.
Havilah Shareholders will need to remain vigilant, to make sure this happens.
I consider the iron ore assets to be a Major Asset given their in-ground value exceeds all other Havilah asset in-ground values combined (based on JORC resources and current spot metal prices). When you add in the potential in-ground value of the Grants Iron Basin, it is likely to be many multiples.
If the Whyalla steelworks does get listed, under
ASX Listing Rule 11.4 (
‘Disposal of a Major Asset Involving an Entity to be Listed') Havilah's Shareholders should have the opportunity to participate in
any premium that may arise from SIMEC Mining listing its Whyalla operations on the ASX.
If Havilah shareholders are unable to participate in any premium,
they may lose faith in HAV Management, its Directors and the market as a whole.
If the Grants Iron Basin does in fact hold many billions tonnes of iron ore resource, that would fit in perfectly with SIMEC Mining and Mr Sanjeev Gupta’s stated plan he announced publicly in Whyalla on 10 December 2018 to build a new 10 Mtpa steelworks at Whyalla.
Cheers
These are only my random thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.
(20min delay)