Hate to say it guys, something doesnt add up here. It looks to me like Nordic Trustees were ready to sell assets and pay back everyone...and then GIC tried to exercise their letter of guarantee - which is what the whole dispute is about. Why would GIC try to exercise their letter of Guarantee?...unless they thought that they were not going to get all that is owed to them...
...which perhaps means that Nordic Trustees were going to sell the assets cheap...so that maybe GIC wasnt going to get everything...and if GIC wasnt going to get everuthing owed to them, neither are we. which is why when GIC filed its petition, Randeep said he was in support of it.
I think that Nordic are trying to sell the assets cheap...or maybe they are trying to sell them at a cheaper valuation than what randeep thinks is fair.
Regardless the courts have thrown out the petition by GIC and Nordic are presumably now going to go ahead with the sale...unless GIC disputes this in London courts (which seems unlikely as they have already admitted that their letter of guarantee doesnt hold water).
So, one way or another we are close to a resolution...whether we get anything is still in question.
FULL DISCLAIMER: I am a long standing and pained shareholder...I hope we get what is fair for all this hassle.
Response from jols....
Please be advised that there were not sufficient volunteers for a liquidation committee to be constituted. The Joint Official Liquidators will publish a notice on the RNS is the coming days.
Hate to break it to you guys...but I tried to send Rebecca of the JOL's office an email.
Got an out of office...she is out until 4th Jan...
I severely doubt there is going to be any announcement this side of the JOL
Sorry, it was my error - I was referring to the RNS from yesterday...only saw it today for some reason.
I dont mean to sound rude, but dont trust the fact that existing shareholders have not sold yet. Liquidity on the stock is terrible and none of them can really exit as there are no buyers of their stake. So they are stuck.
The only other thing I can think of is that the large shareholders want out and have told RG that he might aswell wind up the whole operation and give them back the cash left over. But, for this to happen, one would think a shareholder resolution is needed.
So, I am back to square one...I get there needs to be some kind of administration/receivership at G3 Exploration...but why a liquidation?
To be honest, I dont know - I am feeling my way through this just as you all are. I have seen on some websites that it can by 3-4mths. What confuses me is that if this is about paying down the bondholders from proceeds of asset sales...why put the hole company into liquidation? its like diving into a pool just to get your feet wet...makes no sense to me.
Unless...a company can come out of liquidation after paying creditors...but I cant find any confirmation of this...only the liquidators would know I guess....
Wait wait wait wait wait...as much as RG is an untrustworthy soul...I still believe that he is a greedy individual.
So, after doing some digging, here is my read...
The bonds were issued by G3 Exploration and were secured by a pledge over Greka Gas China's assets. I got this from the 2018 annual report:
"On 8 December 2014, G3 Exploration issued a public corporate bond (the “Bond”) in the amount of US$88,000,000.
The bond was issued at a discount of 2.5% and is senior secured three-year paper due on 20 November 2017. The
Bond carries a 10% coupon payable semi-annually and also carries a redemption premium of 2% at maturity. In the
event that any amount due under this Bond Agreement or any Finance Document is not made on the relevant due
date, the unpaid amount shall bear a further penalty interest from the due date at an interest rate equivalent 5%
per annum. The Bond is secured by a pledge over the shares of Greka Gas China, a wholly-owned subsidiary of G3
Exploration. The bond was initially recorded at fair value and is subsequently carried at amortised cost. Issue fees of
US$1,893,000 were offset against the principal amount of the bond and will be amortised as part of the effective
interest rate charge to the maturity date. "
Greka Gas China was a wholly owned subisidary of Green Dragon Gas which was in wind up proceedings. So, IF it was wound up...then the cash from the sale of assets would come into G3 Exploration. If you were the bond holders, your next step would be to put G3 Exploration into Liquidation so that you could pay out the cash proceeds that came from the sale of Green Dragon Gas assets to yourselves (the bond holders). So, I think what they have announced is a natural next step to resolution of the issue...probably explains why stock was allowed to trade.
Once the bond holders are paid back...then the company is probably taken out of liquidiation and given back to management. This is my best read.
Although I would say in other countries this is not called Liquidiation...it is called Administration or Receivership.,...but maybe Cayman islands has different terminologies? Any thoughts welcome.
Corporate update out this morning. Looks like its all come to an end...G3 Exploration put into liquidation. 3 out of 3 for Mr. Grewal. First, Greka Engineering, then Greka Drilling...and now g3 Exploration.
Thanks Mr. Grewal!
Moral of the story: Doesnt matter how good the asset is, you have to trust the person who is running it for you.
Because randeep does not want to be diluted. They had so many chances to do an equity raising years ago and he refused to do it due to dilution...although he would have still controlled G3E...just greed.
A debt for equity swap when the price is at 10p would spell doom for randeep. He would be wiped out od the company.
I agree with Mark@1973. The assets are valuable and far outweigh the liabilities. Especially now that China has set up a separate pipeline company...these dometic gas assets get even more valuable as they have connectivity to the main distribution trunk lines.
It will be fine. This is just typical Randeep. He wants to stick it to the people who doubted him and didnt back him. Why should anyone make a quick buck off of him?
What will be done is that he will put an announcement out which gives all the details and the stock will open significantly higher. If you are set...good for you...if not...too bad.
We just need to wait now.
Disclaimer: I am a frustrated holder (so not a ramper or deramper).
Come one, come all to the Randeep Rodeo...where its not your ride, but Randeep's ride. He will stop when he wants and he will start when he wants.
This is always the frustration with this company. Great asset, terrible management/owner.
I find it very hard to believe that due to covid they couldnt complete the accounts. How many other chinese companies are there which are 1,000x (or even more) larger than GDG and they have gotton their accounts approved by auditors, published and continue to be listed.
I think there is something happening...the asset is valuable and the JOLs have a legal obligation to sell at the right price. In my view, basically Randeep doesnt want people to make money. Many people disbelieved him and he doesnt want people who have followed the stock for a long time to get in low and benefit. If you have been here for the Randeep Rodeo...another 10 days, 1 mth, 2 mths will not hurt. Lets see how it goes.
Liquidity for one...and also because they see the value...and the company has kept kicking the can down the road...saying it will come soon...come soon...come soon...come soon...which is my point on credibility. This whole process is being driven by the bondholders. Left to the company, doubt anything would have changed.
Your best guide is the 1P, 2P and 3P valuations they have on their presentation. Somewhere between 1P and 2P is probably right...but I think the management has burnt a few bridges in China
October 2019 presentation is a good place to start.
imho...this is a great asset and regulatory changes in china really support the GDG asset (and the G3E acreages). Even at 20p its massively undervalued in my view...but you really need to be happy to back management. I have backed them in the past and been consistently disappointed - maybe this time is different....lets see. I hope we come out golden!