I received a call from a company representative this morning.
I was advised that the retraction of the scoping study was released as soon as LMB was advised of the request. I was told this was a grey area, that the company was debating with ASIC and the ASX in favour of what they orignally realeased. Numerous solicitors were consulted but they realeased the information as they got it.
The trading halt for the progression of the merger was also advised from a legal department as well. The company was under the impression that by releasing the one page document confirming the go ahead of the merger would put ease in the minds of the holders and bring stability to the SP.
As for the due diligence and the recent announcement. I was advised that the company had conducted a thorough investigation. However a representative of Hengda had leveraged off the shares to take out a loan. Currently LMB is in the process of potentially restructuring a new agreement to benefit the shareholders. If this new agreement isnt met, walking away from the deal may be an option.
HXG Price at posting:
33.0¢ Sentiment: Hold Disclosure: Held
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