RE: KC in Singapore11 Apr 2023 12:28
8. POTENTIAL DISADVANTAGES OF THE PROPOSED SUBSCRIPTION
The potential disadvantages to the Shareholders of approving the Ordinary Resolution are as follows:
(i) The Company will be diluted to a minority (49%) interest in its sole operating subsidiary, thereby
giving up majority control over the operations of its major asset.
(ii) If the Company is unable to fund its share of future ongoing requirements of Geomet following
completion of the DFS, then its interest in Geomet may be diluted at such time.
(iii) While the Geomet Shareholders’ Agreement includes certain minority shareholder protections with a
number of reserved matters which require the approval of both CEZ and EMH, in the event of a
deadlock on completion of the proposed work programme if the parties disagree on a construction
decision, CEZ has the right, but not the obligation, to buy EMH’s interest in Geomet at market value,
albeit subject to any applicable regulatory approvals required at such time, including shareholder
approval.
I take section (iii) to mean IF the parties dissagree on a construction decision after the program of work is completed then CEZ have the right to buy out EMH at Market value, but why wouldnt they decide to construct? or is there more to this than what I see?