PushBack

7 Mar 2016 By Quentin Webb

The fund giant is staging an unusual public campaign against a midcap that wants to ditch mining for finance. The latest outbreak of investor assertiveness in the city is welcome. It’s a shame that many other firms remain shielded by powerful insiders and docile retail owners.

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BlackRock has urged fellow shareholders in G-Resources to vote against a planned $775 million-plus sale of the Hong Kong-listed group’s main asset, Indonesia’s Martabe gold mine. G-Resources aims to sell Martabe and refocus on money-lending, brokerage, property and principal investments. The vote is due on March 8.

The buyer is a consortium led by EMR Capital, a private equity firm headed by G-Resources Vice Chairman Owen Hegarty. Both sides say Hegarty played no role in the deal. The consortium, which also includes hedge fund Farallon Capital and two Indonesian investors, will pay $130 million more if average gold prices exceed $1,500 an ounce for any 12-month period before January 2019.

BlackRock said on Feb. 29 that Martabe was a “particularly good asset”. The world’s biggest asset manager added that it lacked confidence that sale proceeds would be well used and complained of a “startling lack of detail” about future plans. “None of the current senior management team appear to have any background or experience in the new businesses,” it added.

G-Resources did not respond to an emailed request for comment. It told the Financial Times on Feb. 29: “We believe we have put forward for our shareholders’ consideration what is best in the interest of G-Resources. All along, our board has been striving to create value for G-Resources and hence our shareholders.”

Shares in G-Resources stood 1.8 percent lower at HK$0.215 by 1130 in Hong Kong (0330 GMT) on March 7. The stock has risen 22 percent since Nov. 20, the last trading day before it announced the planned Martabe disposal.

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