It all began on 17 June when the company made an announcement saying that CEO Tjandra Adi Pramoko had trimmed his stake in Alliance Mineral from 34.21%, or 164,449,762 shares, to 24.62%, or 118,374,974 shares, for a consideration of $14.74 million. It was also announced that the stake, which also belonged to Living Waters Mining (Australia) Pty Ltd and Pramoko’s wife Suen Sze Man, had also been reduced.
Nothing bad happened. As a matter of fact, the share price of Alliance Mineral closed up two cents on 19 June from the last traded price on 16 June.
On 21 June, it emerged that Jonathan Lim Keng Hock had become a substantial shareholder by gaining control of the 46,074,788 shares, or a 9.58% deemed interest, in the company. On 10 July, a bombshell was dropped when it was announced that the entire remaining 24.62% stake belonging to Pramako, Suen and Living Waters Mining, had been seized by Grande Pacific Limited – a company owned by the wife, Mdm Marilyn Ting Hong Lean, of Jonathan Lim Keng Hock.
Oops, why like that?
Jonathan The New Player?
Alamak! It now seems that Jonathan Lim and his wife control a total stake of 24.62%+9.58%=34.2% of Alliance Mineral! Does that mean the two of them have triggered a mandatory takeover level for the company?
Wait a minute! It was then reported that the seizure of the shares arose out of an unsettled debt owed by Living Waters Mining to Grande Pacific. But the debt of $7 million owed to Grande Pacific is much less than the number of shares seized (estimated to be around $49 million) hence any remaining unsold shares are expected to be transferred back to Living Waters Mining. That means Jonathan Lim and his wife will not trigger a takeover after receiving proceeds from the sale of the $7 million worth of shares.
Strangely, the first tranche of 46,074,788 shares amounting to $14.74 million that was transferred from Living Water Mining to Jonathan Lim on 17 June is more than enough to cover the $7 million debt; so why did Grande Pacific continue to seize the remaining stake of 24.62% on 10 July?
What He Wants?
Some stockbroking house said that the seized shares could create an overhang on the share price but it is absolute b******t! After the share seizure, we have yet to witness a share-price collapse and Jonathan Lim has yet to make any announcements regarding the sale of his stake to satisfy the $7 million debt. It seems unlikely that Jonathan Lim will want to sell any shares if he is interested in more than just the repayment of the debt.
So how do we explain the trading halt leh? Why halt already then call for suspension?
The trading halt was called on 11 July followed by a suspension on 14 July because companies cannot suka suka halt trading for more than three trading days.
Likely To Be Positive
In a show of confidence in the company, Alliance Mineral then explained on 18 July that it has received the second lithium (from the Bald Hill project) offtake prepayment of A$4.375m from a subsidiary of HK-listed Burwill Holdings, which also claimed that unless certain conditions are met, meaning that the company is indeed backed by fundamentals and not a fly-by-night bucket shop, Burwill’s subsidiary would not have paid up!
It is likely that Jonathan Lim has heard of this, and is aware of Alliance Mineral’s strengthening fundamentals since he has been an interested party ever since he extended the $7 million loan to Living Waters Mining. Meanwhile, Alliance Mineral said that it is in the midst of preparing another report on its crown jewel Bald Hill hence the suspension. Since Burwill’s subsidiary has confirmed the resources available at the Bald Hill project and has paid up, it simply means that there will only be positive announcements pertaining to the update. It could also mean that Pramoko is talking to Jonathan Lim on how to arrive at a win-win situation.
Till then, be patient and ride out the suspension period.