Sanjeev Gupta says his disputed $100 million deal with Havilah Resources should deliver substantial shareholder value
Sanjeev Gupta has weighed into the fracas around his plan to invest up to $100 million in Havilah Resources.
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Sanjeev Gupta says his $100 million deal to invest in Havilah Resources will deliver “substantial value to all shareholders’’ as the vote on the disputed transaction nears.
Adelaide company Havilah is embroiled in an internal fight for control, with its independent board members supporting a $100 million deal which could see Mr Gupta’s GFG Alliance earn up to a 51 per cent stake in the company by investing in iron ore and copper assets.
The money would rapidly examine two of the company’s major assets and bring them to a stage where a decision to go ahead with mining could be made.
But former executive chairman and company co-founder Bob Johnson, who is the subject of an ongoing Australian Federal Police Investigation, is leading a charge to block the deal, saying it constitutes an “unfair takeover’’.
In response the Havilah board has asked the takeovers panel to intervene, saying Dr Johnson has breached the Corporations Act by exercising control of 38.51 per cent of the shares in the company.
The board wants the Takeovers Panel to restrain Dr Johnson, who has also asked shareholders to nominate him as a proxy, from voting at the meeting on September 12.
The panel has yet to decide whether to get involved.
In a letter posted to the ASX by the company, Mr Gupta says the deal will be a boon for Havilah shareholders.
“With our proposed funding of up to $100 million structured over the next three years, GFG will be a cooperative long-term partner for Havilah,’’ Mr Gupta writes.
“I believe this investment will strengthen Havilah’s ability to generate future value from its portfolio through the definitive feasibility study, project development, and commercial production.
“Together with Havilah’s skills and expertise, the significant cash contribution from our equity investment should deliver substantial value to all shareholders by unlocking the value of the early stage mining assets owned by Havilah.’’
Mr Gupta said GFG, which owns the Whyalla steelworks and substantial steel and manufacturing assets around the world, would be a customer and also potentially give Havilah access to global markets.
“Along with our direct investment, GFG currently intends to be a future customer, providing Havilah with access to an end-user steelworks and export facility at Whyalla and globally,’’ he writes. “
“We expect Havilah products will be an important future input into GFG’s supply chain and our global steel making businesses.
“Importantly, as a principle, GFG expects any future supply contracts with Havilah to be negotiated on a commercial, arms-length basis.’’
Mr Gupta emphasised that the current senior management would continue to manage Havilah and that GFG was committed to maintaining an independent board.
“Finally, as a global firm, with deep, long standing relationships in international markets, GFG will also be well placed to facilitate global access for Havilah — potentially unlocking further value.
Havilah shares were steady on 14c.
cameron.england@news.com.au