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LONDON (Alliance News) - Coal exploration & development firm G3 Exploration Ltd on Tuesday said its shareholders will receive a direct interest in Green Dragon Gas via a dividend in specie issue.
Green Dragon is G3's wholly-owned subsidiary which holds its producing assets. G3 has been looking into different monetization options for Green Dragon.
The dividend will represent 100% of the commercial producing assets and G3 will retain all its exploration and development assets.
"The structure will enable qualifying G3 shareholders to potentially benefit from the free cash flow generated by the producing assets whether via a trade sale or an initial public offering and separate listing," G3 said.
After discussing with several partners the options to monetize Green Dragon, G3 said "it became clear to management that trade sales may provide a better monetization event for shareholders than an IPO".
Therefore, sales processes for the producing assets of Green Dragon are underway, G3 said and bids are expected from a number of interested parties in March.
The proceeds from the Green Dragon sale will be used to pay down its USD270 million debt with G3, which will in turn use part of those funds to settle debt.
"The approval of the dividend in specie, our third since 2006, is a landmark moment for G3 Exploration which will allow us to complete the planned separation of the producing assets from our exploration and development assets," Chair Randeep Grewal said.
G3 shares were trading up 1.0% at 38.88 pence each.
