Monday December 8, 2008Melewar holding on to Gindalbie stakeBy...

Monday December 8, 2008
Melewar holding on to Gindalbie stake
By ELAINE ANG




Datuk K.C. Lim
MELEWAR Industrial Group Bhd (MIG) plans to hold on to its investment in Australia’s Gindalbie Metals Ltd despite a collapse in the mining company’s share price, and will pursue recovery of the shares pledged with a bank, said chief executive officer Datuk K.C. Lim.

Gindalbie shares closed at 42 Australian cents, up 2 cents, on the Australian stock exchange on Thursday versus a year’s high of A$1.82 on June 3.

According to Lim, prospects were still bright for Gindalbie with its iron ore mining operations on track to start operations by the last quarter of 2009.

“This is a long-term investment for us. The drop in share price is just a temporary glitch as Australia’s mining industry has been badly hit by the global financial crisis and drop in commodity prices,” he told StarBiz.

Another point in favour for Gindalbie was that partner Anshan Iron & Steel Group Corp (Ansteel) would be subscribing to an additional A$162mil worth of Gindalbie shares for 85 Australian cents each, thus helping to boost investor sentiment, Lim added. This would make Ansteel the largest shareholder in Gindalbie with a 36% stake.

“Ansteel is a strong partner to have and one we are very comfortable with. Ansteel has undertaken to purchase all of the iron ore produced by Gindalbie, which will be about eight million tonnes per annum initially,” Lim said.

MIG, which bought Gindalbie shares for 10 Australian cents per share in 2004, suffered a net loss of RM95.59mil in the first quarter ended Sept 30 compared with a net profit of RM8.18mil a year ago, after its 14.46% stake (74.08 million shares) were marked-to-market at 68.5 Australian cents per share.

“We experienced a double whammy, in terms of share price drop and a weaker Australian dollar, which resulted in such a big loss. MIG was actually profitable in the first quarter, turning in an operating profit of about RM22mil,” Lim said.

Nevertheless, he admitted that MIG was prepared for another paper loss of some RM40mil in the fourth quarter ending Dec 31, if Gindalbie’s share price remained at current levels until year-end.

On MIG’s claim against Australia and New Zealand Banking Group Ltd (ANZ) for the return of the 35 million Gindalbie shares, Lim said its lawyers were confident of recovering the shares but that “the earliest date for a hearing would be in the next six months.”

The group had pledged the shares to Opes Prime Stockbroking Ltd against an outstanding loan of A$11.1mil. Opes group has since appointed a voluntary administrator and subsequently, ANZ, a secured creditor of Opes, appointed receivers and managers for the Opes group.


Comment ..We haven't heard much by Meleware ..they are with S+G from memory and argue amongst other things
Reliance on the Opes Website and Non Lodgement of substantial shareholder notices by ANZ

There has been a directions hearing or hearing in Sydney in which Meleware sought discovery of both ANZ + ML files etc on substantial shareholding notices ie Why they weren't lodged ..further details on the alleged waiver

Counsel for the defendants opposed the expansion of the case and the attendant discovery ..for reasons it would be embarrassing

I am sure ..they had other reasons but embaressment stuck in my mind at the time

(I surely hope so ..was the writers reflection at the time)