PSL Holdings Ltd - Who is in charge after various substantial share transactions?

5/2/2015 – PSL Holdings Ltd says it has received a refund of the remaining US$4 mln deposit that it made to Longmen Group Ltd, after plans to buy a 100% stake in the firm went sour.

The ground-engineering-services company has charged interest at a rate of 5.33% per annum for the period from October 14 to January 5.

The first US$1 mln was repaid on December 1 last year.

Incorporated in Mauritius, Longmen Group Ltd has a partnership with Petro China to develop and exploit a coal-bed methane (CBM) concession namely, Hancheng Block located in the southern portion of the Ordos Basin in Shaanxi Province of China for 30 years from 2007.

Longmen Group Ltd is also the operator of the Hancheng Block.

Longmen also has an agreement with the Hancheng Coal Mine Bureau to develop, produce and sell CBM gas in the Sangshuping, Xiayukou and Xiangshan coal mines.

LESS Longmen Co Ltd - strategic fund of funds focused on investing in recycling, renewables, forestry and organic food production - is the controlling shareholder of Longmen Group Ltd.

CKIF I (HK) Investment Limited and Aloe Environment Fund are among the other shareholders of Longmen Group Ltd.

In May last year, PSL Holdings Ltd signed a Memorandum of Understanding (MoU) with Longmen Group Ltd to invest US$40 mln in it, including a US$5 mln deposit which it paid up-front.

After completing the due-diligence, PSL Holdings Ltd also had plans to purchase shares in Longmen Group Ltd from other shareholders for a cash consideration.

In its response to SGX queries on May 23, PSL Holdings Ltd said it had intentions to acquire a 100% stake in Longmen Group Ltd.

However, that didn't happen as PSL Holdings Ltd and Longmen Group Ltd decided not to extend the exclusivity period beyond October 13 last year.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.

Question

1. Why did the deal fall apart?

PSL Holdings Ltd has not disclosed why the exclusivity period was not extended beyond October 13.

Was it due to something adverse that it discovered in its due-diligence on Longmen Group Ltd?

Question

2. How much did Longmen Group Ltd pay in interest to the company?

According to our back-of-the-envelope calculations, PSL Holdings Ltd seems to have earned an interest of about US$7,000 on a sum of US$1 mln from October 14 to December 1 and an interest of US$48,000 on the remaining US$4 mln for the period from October 14 to January 5.

So, how much did it actually receive as interest on delayed refund payments by Longmen Group Ltd?

(Read the full story to get all 14 questions)

We have invited the company's CFO (soonngian@pslgroup.com.sg) to an on-camera interview, and/or to reply to our questions in writing.

At the time of publication we have not received a reply (which is why you are seeing this message).

We will update this report if we do.

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