RE: Sealed bids29 May 2020 13:35
Hi allthatguff/G_G_G,
I think the 50 % +1/-1 is a complication. ZIOC is a single project promoter (interested in maximising its return), GLEN has multiple fish to fry : as oil trader /creditor in C-B and as major commodity trader with China (largest supplier to seaborne coal market, just spent $ 3.7Bn on coal mines in Oz; already an iron ore trader (65 mtpa), mainly to SE Asia; might want to be an iron ore producer but doesn't like 'greenfield'; so maybe let FMGL take the mining risk in exchange for a long-term offtake agreement ?).
So GLEN may look at the bigger picture/wider relationship issues and have a different price/strategy for Zanaga than ZIOC does ?
Another wrinkle is that AIUI from RNS 13 Sept 2013, GLEN has 'right of first refusal' over ZIOC's share in Zanaga, see :
…"The pre-emptive, change of control, call option, and tag-along provisions have been modified, reflecting the changes in ownership since the JVA was signed in 2009:
· The call option which Glencore had over the ZIOC shares in Jumelles has been deleted
· The existing Glencore change of control provisions have been replaced by a change of control provision similar to the existing ZIOC change of control provision
· A transfer of the ZIOC shares in Jumelles is subject to Glencore's rights of first refusal
· ZIOC's tag-along also applies on a change of control of the JV Partner..."
So who does a potential bidder approach ? Depending on who it is - and how much of the Project they want - if they approach GLEN first, GLEN may seek other trade-offs as part of their monetisation of the (inherited) Zanaga asset; if they approach ZIOC first, the potential bidder risks losing to GLEN....who could then (quite conceivably) 'flip' the mine a short while later, either back to the first interested bidder or to A.N. Other. See how Glasenberg 'the dealer' stitched up Mick Davies 'the digger' in acquiring Xstrata for some other (unwelcome for us) ideas on what might happen ....
So with all of this, I'm not sure where the idea of sealed bids would fit in ? The mine by itself is only part of the equation (power, pipeline/railway, port (PN/FDSO), maybe that's where COIDIC come in ? But they're not going to want to risk a scenario where China Inc doesn't emerge as winner.....
All of which makes my head hurt.
Open to suggestions/corrections/clarifications !
ATB
Sign In
Follow the stocks
