Most of You would have seen this , but here it is for those who haven't
Blumont committed to Discovery deal despite share slump
October 07, 2013
Blumont Group's sudden share price slump will not affect its plan to invest US$108 million (RM342.8 million) in Botswana copper miner Discovery Metals, the head of Blumont's copper unit said today.
Shares in Blumont Group shares dived 56% on Friday – one of three firms to see their stocks slide dramatically, sparking trading halts and queries from the Singapore Exchange (SGX).
Those events came after Blumont announced it had agreed on a proposed S$146 million (RM371.6 million) takeover of Australian-listed coal explorer Cokal, which it called off later in the day due to the share price fall.
Asked today whether Blumont was having second thoughts about the Discovery Metals deal, Blumont Copper CEO Ines Scotland said: "Absolutely not. We think the Discovery transaction will add great shareholder value".
Scotland said Blumont's share price slump had nothing to do with the fundamental value of Blumont's portfolio.
"It seems to be due to shorters in the market driving the price down and some knowledge gaps at the SGX about the vision that Blumont are executing," she said in an email to Reuters.
The US$108 million investment by Blumont Copper covers an already purchased 11.6% stake in Discovery Metals and plans to buy US$100 million (RM315 million) in convertible bonds. Blumont Copper is 85% owned by Blumont Group.
The other two Singapore-listed firms to suffer volatile trading in their shares were gold miner LionGold Corp Ltd and investment firm Asiasons Capital Ltd.
All three were cleared to resume trading on Monday, subject to restrictions barring short-selling of their shares and requiring anyone buying the shares to pay up in cash when their orders are executed.
The restrictions are imposed where the exchange thinks there has been manipulation or excessive speculation.
LionGold and Asiasons sought today to have their trading halts continue, saying they have announcements pending. – Reuters, October 7, 2013.
DML Price at posting:
6.6¢ Sentiment: Buy Disclosure: Held
