IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<p><a href="https://www.smartkarma.com/entities/hengxing-gold-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:8874:1" rel="noopener">Hengxing Gold Holding (2303 HK)</a>/HXG is a gold miner and producer which owns the Gold Mountain Mine, the largest individual mine in Xinjiang, as measured by annual ore processing capacity and gold production. HXG has total gold resources of 77.28 tonnes and total gold reserves of 39.76 tonnes.</p><p>HXG has received an all-stock privatisation offer from <a href="https://www.smartkarma.com/entities/shandong-gold-mining-co-ltd-61153493-5437-47ee-a8d3-aec41fb7f1da" target="_blank" data-smartkarma-citation="entities:27455:1" rel="noopener">Shandong Gold Mining Co., Ltd. (1787 HK)</a>/SDGM. SDGM is offering 5/29 SDGM H share for every scheme share. The share exchange ratio will not be adjusted for the HXG special dividend (RMB0.3157/HK$0.3585 per ordinary share) which will be paid on 30 October 2020. The privatisation price of HK$3.29 based on the last close prices implies a discount of 2.43% to the HXG last close price of HK$3.73 less the HXG special dividend resulting in a net price of HK$3.37 per HXG share.</p><div class="content-highlight"><p>The key conditions precedents are the headcount test and the scheme approved by at least 75% disinterested shareholders (&lt;10% disinterested shareholders rejection). SDGM and concert parties do not hold any HKG shares. SDGM has received irrecovables representing 75.00% of shares outstanding. Overall, we believe that the privatisation proposal will complete. </p></div>

Hengxing Gold Holding (2303 HK)/HXG is a gold miner and producer which owns the Gold Mountain Mine, the largest individual mine in Xinjiang, as measured by annual ore processing capacity and gold production. HXG has total gold resources of 77.28 tonnes and total gold reserves of 39.76 tonnes.HXG has received an all-stock privatisation offer from Shandong Gold Mining Co., Ltd. (1787 HK)/SDGM. SDGM is offering 5/29 SDGM H share for every scheme share. The share exchange ratio will not be adjusted for the HXG special dividend (RMB0.3157/HK$0.3585 per ordinary share) which will be paid on 30 October 2020. The privatisation price of HK$3.29 based on the last close prices implies a discount of 2.43% to the HXG last close price of HK$3.73 less the HXG special dividend resulting in a net price of HK$3.37 per HXG share.The key conditions precedents are the headcount test and the scheme approved by at least 75% disinterested shareholders (&lt;10% disinterested shareholders rejection). SDGM and concert parties do not hold any HKG shares. SDGM has received irrecovables representing 75.00% of shares outstanding. Overall, we believe that the privatisation proposal will complete. 

Shandong Gold’s Privatisation Bid for Hengxing Gold

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<p>After shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0929/2020092900255.pdf" target="_blank" rel="noopener">halted</a> after trading closed on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers, <a href="https://www.smartkarma.com/entities/hengxing-gold-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:8874:1" rel="noopener">Hengxing Gold Holding (2303 HK)</a> (HGH) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0930/2020093001586.pdf" target="_blank" rel="noopener">announced</a> on the 30 September a pre-conditional Scheme from <a href="https://www.smartkarma.com/entities/shandong-gold-mining-co-ltd-61153493-5437-47ee-a8d3-aec41fb7f1da" target="_blank" data-smartkarma-citation="entities:27455:1" rel="noopener">Shandong Gold Mining Co., Ltd. (1787 HK)</a> ("SGM").</p>
<p>Under the terms of the Scheme, SGM is offering 0.17241 SGM shares (5/29) for every HGH share. A special dividend of HK$0.3585/HGH was declared on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0929/2020092900669.pdf" target="_blank" rel="noopener">29 September</a>, for which the record date will be 16 October 2020. The scrip terms will not be adjusted for the special dividend. The offer, inclusive of the dividend represents a discount to last close of 2.2%. Terms will not be increased. </p>
<p>The pre-conditions concern approvals from the NDRC and the Ministry of Commerce of the PRC or the Department of Commerce of Shandong Provincial Government, for outbound direct investment.</p>
<p>Conditions to the Scheme are standard - at a Court Meeting, at least 75% of Independent Shares vote FOR the Scheme &amp; not more than 10% of ALL Independent Shares against. The headcount test applies as HGH is Cayman incorporated.</p>
<p>SGM has received irrevocable of 75% of shares out from Ke Xiping (60%) and his son Ke Jiaqi (15%).  No HGH shareholders are required to abstain. The vote appears a formality.</p>
<p>This deal is effectively done. The only question mark is over the timing of the PRC regulatory approvals.</p>
</div>
<div>
<p>As always, more below the fold.</p>
</div>


After shares were halted after trading closed on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers, Hengxing Gold Holding (2303 HK) (HGH) announced on the 30 September a pre-conditional Scheme from Shandong Gold Mining Co., Ltd. (1787 HK) ("SGM").
Under the terms of the Scheme, SGM is offering 0.17241 SGM shares (5/29) for every HGH share. A special dividend of HK$0.3585/HGH was declared on the 29 September, for which the record date will be 16 October 2020. The scrip terms will not be adjusted for the special dividend. The offer, inclusive of the dividend represents a discount to last close of 2.2%. Terms will not be increased. 
The pre-conditions concern approvals from the NDRC and the Ministry of Commerce of the PRC or the Department of Commerce of Shandong Provincial Government, for outbound direct investment.
Conditions to the Scheme are standard - at a Court Meeting, at least 75% of Independent Shares vote FOR the Scheme &amp; not more than 10% of ALL Independent Shares against. The headcount test applies as HGH is Cayman incorporated.
SGM has received irrevocable of 75% of shares out from Ke Xiping (60%) and his son Ke Jiaqi (15%).  No HGH shareholders are required to abstain. The vote appears a formality.
This deal is effectively done. The only question mark is over the timing of the PRC regulatory approvals.


As always, more below the fold.


Hengxing (2303 HK): Offer From Shandong Gold

China

Hengxing Gold Holding Co Ltd acquires, explores and develops gold mining projects in China and surrounding areas. The Company owns and operates Gold Mountain Mine that is located in Xinjiang, China

Hengxing Gold Holding (2303 HK)

Shandong Gold’s Privatisation Bid for Hengxing Gold

Hengxing Gold Holding (2303 HK) HXG is a gold miner and producer which owns the Gold Mountain Mine, the largest individual mine in Xinjiang, as...

Arun George

Hengxing (2303 HK): Offer From Shandong Gold

After shares were halted lunchtime on the 22 September pursuant to the Hong Kong Code on Takeovers and Mergers, Amvig Holdings (2300 HK) last...

David Blennerhassett