SIAS’ Reply to GEAR Limited’s Announcement Dated 31st May 2023

Date: June 5, 2023

Dear Mr Fuganto Widjaja and Members of the Board,

SIAS refers to the Golden Energy and Resources (GEAR) Limited’s announcement dated 31 May 2023 which the company noted that “inaccuracies and omissions in the SIAS Letter that need further explanation”.

First of all, SIAS notes the company’s comments and would like to set the record straight: SIAS calls on minority shareholders of GEAR to accept the proposed DIS of GEMS and to reject the proposed voluntary delisting of GEAR from SGX-ST at the EGM.

Furthermore, we would like to remind shareholders of the utmost importance of pre-registering for the online Extraordinary General Meeting (EGM) by 10 am on 6 June 2023. Registration is necessary to ensure shareholder’s ability to vote on the two critical resolutions. It is crucial to note that the distribution resolution and the delisting resolution are inter-conditional. If either of these resolutions is not approved at the EGM, none of the proposed resolutions will be carried out.

We agree, as we stated earlier, with the IFA that no single method of valuation will be met with universal acceptance and SIAS, in exhibiting professional scepticism, agree with the IFA that we can agree to disagree.

Lastly, while the IFA may consider their reasoning to be clear-cut, SIAS would like to provide feedback that their justifications are subjective and may not be as convincing as they perceive them to be. For example, while Geo Energy Resources was included because it is “broadly comparable to GEAR”, SIAS can likewise point out that Geo Energy is an Indonesia pure-play with thermal coal assets and while Stanmore is a significant metallurgical coal player. These differences raise questions about the true comparability between the two companies. Also, how else can shareholders understand that the IFA “considered the mid-point value of the SOTP valuation of GEAR of S$1.072 for the maximum value of the Shares”? Also, as a sense check, what is the EV/TTM EBITDA of GEMS and what is that of GEAR?

Granted, historically, the IFA opinion has been a one-way street with minority shareholders having no say in the choice of the IFA and the IFA opinion. SIAS recognises that there are more appropriate channels to address these concerns. With the EGM coming up in a few days’ time, SIAS call on minority shareholders to review the EGM circular and vote wisely at the EGM.

With a skew of going-private offers hitting the market, SIAS stands by its view that the IFA process can be and should be improved. More can clearly be done to protect the investing public when it comes to takeovers-cum-delistings.

At the end of the day, minority shareholders will make the decision to follow or reject the IFA’s opinion and the recommendations of the non-conflicted directors.


David Gerald
President and CEO