Ann: Supreme Court Approves s4444GA Transfer, page-26

Apologies for presenting our submission in this jumbled form but I'm b'd if I can get it to paste and copy in its submitted form. The guts of the material is there. The marginal numbers are irrelevant, the heading "summary" is misplaced and should appear before No 7, the final section (see No 13) was a plea to impose a fairer version of the DOCA (we did not realise there was any chance of stopping it). Points 10-12 should appear before the summary:



1) KPMG have claimed that the DOCA was first proposed by an Ad Hoc Committee (AHC) of creditors and consequently held a meeting with them to advise that they accept their own proposal.
KPMG appear to have not attempted any other form of restructure and claimed there was no opportunity for such. No authentication or any evidence of any other attempts or solicitations for alternate approaches has been revealed.

2) There is no evidence of any canvassing of proposals from other stakeholders or interested parties, this is despite the fact that some shareholders who contacted the Administrator KPMG during the administration period claim they were told that there were several restructure proposals were under consideration. This was back in September 2017.

3) KPMG's report is incomplete and not current in that:

(a) It has omitted the fact that although CNNC made a loan of $90M to PDN, it has not paid its 25% share of all in cash costs of running Langer Heinrich Mine (LHM) since purchase of that proportion of the mine in 2014 (as announced to the market by PDN CEO Andrew Molyneux on 23^rd March, 2017). That amount could be in excess of $100M and would offset that loan which has been included within total debt.

(b) There is no accurate account of the new debt incurred to PDN by Deutsche Bank (DB) after the recent settling of Electricite de France SA (EDF) claim on PDN. What is this debt and what is the security for this debt and what are the terms over PDN or any of its assets DB holds now? How is it possible for any DOCA agreement to be reached the details are unknown. ASX listing rule 3.1 required continuous disclosure of all material information that relates to value. Given that it was EDF that triggered the Administration on the 3^rd July 2017 with a demand of repayment of their $277mln loan to PDN, it is extraordinary that there are no details disclosed of DB’s claims and future potential claims over PDN. How is it possible for any DOCA or restructure proposal to be agreed to let alone approved by the Court without the details of DB’s true claim over PDN?

(c) There is no inclusion of detail concerning the September and December 2017 quarterly financial reports for PDN. This occurred before permission has been later granted by the ASX to delay this information until after the DOCA hearing. We are provided with a “Independent Report” but without a proper set of audited accounts how can shareholders even verify the veracity of Independent Report. It is incumbent that the Administrator keep all stakeholders fully informed of PDN financial position. How are shareholders, other stakeholders able to properly value the company to determine whether the shares are truly worthless? How can the Court be satisfied of the true value if proper audited accounts have not been provided so they can be interrogated and verified? Those accounts would also require disclosure of Point (b) DB acquisition of EDF’s loan.


(d) Discounting that $90M part of the total debt to creditors (if CNNC is included as a creditor) may have facilitated a fair and genuine takeover offer to shareholders, of 4.7c per share, or market cap of $80.5M (the share price upon administration) rather than taking of 98% of the shares for nothing.

(e) The independent expert's report claims that the share have no value is based on the specific financial case presented by KPMG, however that is pertinent only to the unauthenticated claim that there were no other options for restructuring PDN. For example, the first restructure being reapplied or approaches for example to India who have expressed interest in Namibian uranium. Is there any documentation is available to prove that any such attempts were made by the administrator?

(f) The first restructure proposed by Korda Mentha (KM) which had been agreed to by 2017 and 2020 bondholders, and in which PDN was protected until the end of September, 2017 by a standstill agreement, was only thwarted by the late claim by EDF for $277M. The latter move forced PDN into administration which itself could have served to protect PDN while negotiations were made with EDF. It is clear that in KPMG's reports that there was no communication with EDF for any solution by the fact that EDF expressed opposition to the DOCA only once it was announced.

(g) The fact that EDF's demands could be negotiated and settled by an undisclosed deal with Deutsche Bank in order to ensure the DOCA is successful, proves the original lack of any such effort by KPMG in negotiating a similar deal which may have allowed the first restructure to then succeed. How is it possible that the EDF matter could be resolved so quickly by DB yet when we examine KPMG’s announcements to the market there is no evidence anywhere of attempts to resolve the EDF claim let alone look at implementing the restructure proposals during 2017 proposed by the PDN Board. ?

(h) The $115M note raise has been quickly completed before the DOCA has been approved. Were subscribers assured beforehand by KPMG that the DOCA will be approved, otherwise who would invest in a company which might be liquidated should the DOCA fail? Will KPMG reveal whether members of the Ad Hoc Committee and/or Deutsche Bank were subscribers to the note raise? If their incentive to gain control of PDN is so strong, why not raise another $80.5M and pay out shareholders at last price?

(i) KPMG have released no details of the EDF/DB arrangement, even giving the impression of having little knowledge of it. This would seem incredible since DB loaned the administrators $60M to pay their fees and maintain the running of LHM; also that the success of the DOCA depended on removal of EDF's demands and their objection to the DOCA.

(j) KPMG have not responded to two emails from myself concerning restructure options, nor to others, except for some who requested general information. KPMG have seemed reluctant to respond to enquiries concerning the current DOCA. I have spoken to other shareholders who also have had little to no response to enquires on how matters were progressing let alone KPMG canvassing interest from stakeholders.

(k) The latest CEO of DB was formerly CEO of UBS when it was a substantial shareholder in PDN. UBS acted like a hedge fund during the decline in share price of PDN. Thus there has previously been a connection established between this CEO and PDN.

(l) From the time scale involved and the detail of Matthew Woods' reports, it is my opinion that he was working on the DOCA from the outset. No reason is given earlier, and even now that EDF has been accommodated, as to why the first restructure devised by KM could not be reapplied.

(m) Korda Mentha (KM) were first commissioned by PDN to devise restructure but when PDN was forced into administration by the demands of EDF, KM became representatives for the creditors (bond holders).  They had the advantage of intimate knowledge of PDN's finances. It is no coincidence that KM had devised a similar DOCA for Mirabela Nickel (MBN), even to the point of the $115mln USD raise to keep that mine running until the price of nickel improved sufficient to sustain MBN. It would appear in my opinion that KM and KPMG may have consorted to apply the same plan to PDN with the precedent set by court approval of the DOCA for MBN. However the result of that DOCA has been that the MBN mine has been under care and maintenance and shares unlisted, through failure to pay ASX fees, for two years.

(n) The fact that DB was willing to buy out EDF and that $115mln USD could be raised so quickly, contrary to claims made in the “Independent Report” strongly suggest the value of Paladin Energy is not zero and has value and therefore the by extension the shares of Paladin Energy must be worth something. It is hard to believe sophisticated investors would blindly throw $115mln USD and DB would take over the EDF loan if the company was “worthless”. But without a set of audited accounts it puts other stakeholders at a significant information disadvantage. I appeal to the Court to ensure fairness is applied to all stakeholders.



If the court approves the DOCA for PDN either of two outcomes are likely:

1. Langer Heindrich Mine (LHM) will go into C&M because there will be insufficient funds left over from the $115 mln USD note raised after a $60M loan is repaid to DB and the fees of administrators, consultants, experts etc. are paid. No details of the commitment by DB to resolve EDF's claim and resultant financial implications for PDN have been revealed. Future exchanges indicate no adequate increase in spot price of uranium is forthcoming that will make LHM profitable.
3. With possession of 98% of PDN shares the “Ad Hoc Committee“ (AHC) may act like a hedge fund and artificially control the price of PDN shares. The market cap could easily be increased from the current $80.5M to well over $1B by trading within the group. Selling of such inflated shares to the public could fund the running of LHM but also make huge capital gains for the AHC.    Appeal to the court for a fairer outcome for shareholders.It is requested that the court consider the approval a modified version of the DOCA whereby shareholders are compensated more fairly by either of the following methods:
7. There has been a seemingly farcical and extended chain of events leading to the current DOCA. PDN, if managed competently and through adequate negotiation could have been restructured one year ago. This failure in restructure could be accounted for by misfortune, incompetence or by deliberate external or conjoined strategies to obtain control of the company. Some have referred to CNNC and EDF as a “tag team “ in their alternate thwarting of attempts at restructure. CNNC and EDF have strong business connections and one of the major bond holders, CIC, like CNNC,is also a Chinese Government agency. Even the CEO appointed to oversee restructure of PDN has close former connections with Chinese parties involved in financing PDN. During late 2016 and wasting a crucial period of months, the CEO's failure to communicate and negotiate with CNNC on sale of a further 24% of PDN, the purpose of which was to repay the March 2017 bondholders, crashed the share price from around 25c down to around 15c, leaving little room for a capital raise to fund the bond repayment. KM was then hired to devise a restructure, a first and a second version of which were blocked by CNNC and EDF. This ultimately has led to the DOCA in which both KPMG and KM have played a role. KM will have profited from representing both sides. Rather than raising an extra $80.5M and ethically taking over shares, KPMG have accounted them as valueless and will confiscate 98% of holders shares.
8. In summary,
9. -------------------------
10. The Namibian Government has a policy of acquiring a substantial percentage of assets developed by foreigners. Has PDN or KPMG made any approach regarding possible sale of part or all of LHM and if not, why not?
11. There has been no mention of any communication with the Namibian Government concerning the DOCA and its possible ramifications for royalty returns, local employment and environmental responsibilities should the the LHM go into care and maintenance. It would be presumed that the Namibian Government should be kept up to date on the state of affairs of PDN and their approval sought in advance of the DOCA being placed before the court
12. KM were paid approximately $2 mln for their earlier role in restructure of PDN. What commission they will obtain for their role in setting up the DOCA on behalf of the creditors is unknown. From an ethical point of view one would have expected that KM would have been satisfied to see their first restructure plan succeed. However it is clear that there will be greater financial reward forthcoming from their role in additionally representing creditors through the DOCA.

1. A genuine takeover by the AHC involving pay out to holders at the last market cap value of $80.5M. A $115M note raise was easily accomplished by the administrator, why not another $80.5M for compensation of shareholders?
2. Reduce the proposed 98% transfer to a more equitable number, perhaps 90 to 95%.
3. A lease agreement whereby the AHC re lists PDN shares leased from the shareholders. Should the above suggested large increase in market cap occur, compensation would be paid to original shareholders by sale of shares to the market. This would involve no further borrowing by the AHC to fund compensation to shareholders. The amount of compensation would be negotiated in relation to the increase in market cap although the base amount should be equivalent to that of (a). Following this arrangement full ownership of the shares would be passed to the AHC.Further negotiation would be required between administrators and the Court as shareholders have no say while under administration. Should the Court deem to conduct such negotiations, an appropriate delay is therefore requested.
4. 2) There is no evidence of any canvassing of proposals from other stakeholders or interested parties, this is despite the fact that some shareholders who contacted the Administrator KPMG during the administration period claim they were told that there were several restructure proposals were under consideration. This was back in September 2017.3) KPMG's report is incomplete and not current in thatb) There is no accurate account of the new debt incurred to PDN by Deutsche Bank (DB) after the recent settling of Electricite de France SA (EDF) claim on PDN. What is this debt and what is the security for this debt and what are the terms over PDN or any of its assets DB holds now? How is it possible for any DOCA agreement to be reached the details are unknown. ASX listing rule 3.1 required continuous disclosure of all material information that relates to value. Given that it was EDF that triggered the Administration on the 3^rd July 2017 with a demand of repayment of their $277mln loan to PDN, it is extraordinary that there are no details disclosed of DB’s claims and future potential claims over PDN. How is it possible for any DOCA or restructure proposal to be agreed to let alone approved by the Court without the details of DB’s true claim over PDN?(c) There is no inclusion of detail concerning the September and December 2017 quarterly financial reports for PDN. This occurred before permission has been later granted by the ASX to delay this information until after the DOCA hearing. We are provided with a “Independent Report” but without a proper set of audited accounts how can shareholders even verify the veracity of Independent Report. It is incumbent that the Administrator keep all stakeholders fully informed of PDN financial position. How are shareholders, other stakeholders able to properly value the company to determine whether the shares are truly worthless? How can the Court be satisfied of the true value if proper audited accounts have not been provided so they can be interrogated and verified? Those accounts would also require disclosure of Point (b) DB acquisition of EDF’s loan.
5. If the court approves the DOCA for PDN either of two outcomes are likely:
7. (n) The fact that DB was willing to buy out EDF and that $115mln USD could be raised so quickly, contrary to claims made in the “Independent Report” strongly suggest the value of Paladin Energy is not zero and has value and therefore the by extension the shares of Paladin Energy must be worth something. It is hard to believe sophisticated investors would blindly throw $115mln USD and DB would take over the EDF loan if the company was “worthless”. But without a set of audited accounts it puts other stakeholders at a significant information disadvantage. I appeal to the Court to ensure fairness is applied to all stakeholders.
8. (m) Korda Mentha (KM) were first commissioned by PDN to devise restructure but when PDN was forced into administration by the demands of EDF, KM became representatives for the creditors (bond holders). They had the advantage of intimate knowledge of PDN's finances. It is no coincidence that KM had devised a similar DOCA for Mirabela Nickel (MBN), even to the point of the $115mln USD raise to keep that mine running until the price of nickel improved sufficient to sustain MBN. It would appear in my opinion that KM and KPMG may have consorted to apply the same plan to PDN with the precedent set by court approval of the DOCA for MBN. However the result of that DOCA has been that the MBN mine has been under care and maintenance and shares unlisted, through failure to pay ASX fees, for two years.
9. (l) From the time scale involved and the detail of Matthew Woods' reports, it is my opinion that he was working on the DOCA from the outset. No reason is given earlier, and even now that EDF has been accommodated, as to why the first restructure devised by KM could not be reapplied.
10. (k) The latest CEO of DB was formerly CEO of UBS when it was a substantial shareholder in PDN. UBS acted like a hedge fund during the decline in share price of PDN. Thus there has previously been a connection established between this CEO and PDN.
11. (j) KPMG have not responded to two emails from myself concerning restructure options, nor to others, except for some who requested general information. KPMG have seemed reluctant to respond to enquiries concerning the current DOCA. I have spoken to other shareholders who also have had little to no response to enquires on how matters were progressing let alone KPMG canvassing interest from stakeholders.
12. (i) KPMG have released no details of the EDF/DB arrangement, even giving the impression of having little knowledge of it. This would seem incredible since DB loaned the administrators $60M to pay their fees and maintain the running of LHM; also that the success of the DOCA depended on removal of EDF's demands and their objection to the DOCA.
13. (h) The $115M note raise has been quickly completed before the DOCA has been approved. Were subscribers assured beforehand by KPMG that the DOCA will be approved, otherwise who would invest in a company which might be liquidated should the DOCA fail? Will KPMG reveal whether members of the Ad Hoc Committee and/or Deutsche Bank were subscribers to the note raise? If their incentive to gain control of PDN is so strong, why not raise another $80.5M and pay out shareholders at last price?
14. (g) The fact that EDF's demands could be negotiated and settled by an undisclosed deal with Deutsche Bank in order to ensure the DOCA is successful, proves the original lack of any such effort by KPMG in negotiating a similar deal which may have allowed the first restructure to then succeed. How is it possible that the EDF matter could be resolved so quickly by DB yet when we examine KPMG’s announcements to the market there is no evidence anywhere of attempts to resolve the EDF claim let alone look at implementing the restructure proposals during 2017 proposed by the PDN Board. ?
15. (f) The first restructure proposed by Korda Mentha (KM) which had been agreed to by 2017 and 2020 bondholders, and in which PDN was protected until the end of September, 2017 by a standstill agreement, was only thwarted by the late claim by EDF for $277M. The latter move forced PDN into administration which itself could have served to protect PDN while negotiations were made with EDF. It is clear that in KPMG's reports that there was no communication with EDF for any solution by the fact that EDF expressed opposition to the DOCA only once it was announced.
16. (e) The independent expert's report claims that the share have no value is based on the specific financial case presented by KPMG, however that is pertinent only to the unauthenticated claim that there were no other options for restructuring PDN. For example, the first restructure being reapplied or approaches for example to India who have expressed interest in Namibian uranium. Is there any documentation is available to prove that any such attempts were made by the administrator?
17. (d) Discounting that $90M part of the total debt to creditors (if CNNC is included as a creditor) may have facilitated a fair and genuine takeover offer to shareholders, of 4.7c per share, or market cap of $80.5M (the share price upon administration) rather than taking of 98% of the shares for nothing.
20. (a) It has omitted the fact that although CNNC made a loan of $90M to PDN, it has not paid its 25% share of all in cash costs of running Langer Heinrich Mine (LHM) since purchase of that proportion of the mine in 2014 (as announced to the market by PDN CEO Andrew Molyneux on 23^rd March, 2017). That amount could be in excess of $100M and would offset that loan which has been included within total debt.

1. Langer Heindrich Mine (LHM) will go into C&M because there will be insufficient funds left over from the $115 mln USD note raised after a $60M loan is repaid to DB and the fees of administrators, consultants, experts etc. are paid. No details of the commitment by DB to resolve EDF's claim and resultant financial implications for PDN have been revealed. Future exchanges indicate no adequate increase in spot price of uranium is forthcoming that will make LHM profitable.
3. With possession of 98% of PDN shares the “Ad Hoc Committee“ (AHC) may act like a hedge fund and artificially control the price of PDN shares. The market cap could easily be increased from the current $80.5M to well over $1B by trading within the group. Selling of such inflated shares to the public could fund the running of LHM but also make huge capital gains for the AHC.    Appeal to the court for a fairer outcome for shareholders.It is requested that the court consider the approval a modified version of the DOCA whereby shareholders are compensated more fairly by either of the following methods:
7. There has been a seemingly farcical and extended chain of events leading to the current DOCA. PDN, if managed competently and through adequate negotiation could have been restructured one year ago. This failure in restructure could be accounted for by misfortune, incompetence or by deliberate external or conjoined strategies to obtain control of the company. Some have referred to CNNC and EDF as a “tag team “ in their alternate thwarting of attempts at restructure. CNNC and EDF have strong business connections and one of the major bond holders, CIC, like CNNC,is also a Chinese Government agency. Even the CEO appointed to oversee restructure of PDN has close former connections with Chinese parties involved in financing PDN. During late 2016 and wasting a crucial period of months, the CEO's failure to communicate and negotiate with CNNC on sale of a further 24% of PDN, the purpose of which was to repay the March 2017 bondholders, crashed the share price from around 25c down to around 15c, leaving little room for a capital raise to fund the bond repayment. KM was then hired to devise a restructure, a first and a second version of which were blocked by CNNC and EDF. This ultimately has led to the DOCA in which both KPMG and KM have played a role. KM will have profited from representing both sides. Rather than raising an extra $80.5M and ethically taking over shares, KPMG have accounted them as valueless and will confiscate 98% of holders shares.
8. In summary,
9. -------------------------
10. The Namibian Government has a policy of acquiring a substantial percentage of assets developed by foreigners. Has PDN or KPMG made any approach regarding possible sale of part or all of LHM and if not, why not?
11. There has been no mention of any communication with the Namibian Government concerning the DOCA and its possible ramifications for royalty returns, local employment and environmental responsibilities should the the LHM go into care and maintenance. It would be presumed that the Namibian Government should be kept up to date on the state of affairs of PDN and their approval sought in advance of the DOCA being placed before the court
12. KM were paid approximately $2 mln for their earlier role in restructure of PDN. What commission they will obtain for their role in setting up the DOCA on behalf of the creditors is unknown. From an ethical point of view one would have expected that KM would have been satisfied to see their first restructure plan succeed. However it is clear that there will be greater financial reward forthcoming from their role in additionally representing creditors through the DOCA.

1. A genuine takeover by the AHC involving pay out to holders at the last market cap value of $80.5M. A $115M note raise was easily accomplished by the administrator, why not another $80.5M for compensation of shareholders?
2. Reduce the proposed 98% transfer to a more equitable number, perhaps 90 to 95%.
3. A lease agreement whereby the AHC re lists PDN shares leased from the shareholders. Should the above suggested large increase in market cap occur, compensation would be paid to original shareholders by sale of shares to the market. This would involve no further borrowing by the AHC to fund compensation to shareholders. The amount of compensation would be negotiated in relation to the increase in market cap although the base amount should be equivalent to that of (a). Following this arrangement full ownership of the shares would be passed to the AHC.Further negotiation would be required between administrators and the Court as shareholders have no say while under administration. Should the Court deem to conduct such negotiations, an appropriate delay is therefore requested.