* Blumont says expressed concerns to SGX
* New chairman sees large scale growth
* Blumont shares end flat after earlier rally
By Rujun Shen
SINGAPORE, Oct 8 Singapore-listed Blumont Group
Ltd, which has lost more than S$6 billion ($4.81
billion) in market value over four turbulent trading days,
questioned the wisdom of the bourse's decision to unlock its
shares from suspension.
Blumont was one of three companies suspended by the
Singapore Exchange Ltd on Friday after their share
prices plummeted by 40 to 60 percent. The bourse said then that
investors may not be fully cognizant of the companies' affairs.
On Monday, the Singapore Exchange allowed Blumont's shares
to resume trading but under certain conditions. The resumption
of trade saw their share price continue to slide.
James Hong, one of Blumont's executive directors, told
reporters in Singapore on Tuesday that the company had expressed
concern to the bourse on Sunday and that investors should have
more time to digest what had happened to the stock.
"We were kind of concerned because a lot of investors might
not have the full picture on what was going on. We were certain
there would be a lot of panic," he said.
"That's why we consulted the exchange, telling them maybe
they should hold on for a few more days," Hong added,
acknowledging though that they are bound by the exchange's
In response to the trading halt, Blumont put out a statement
late on Friday saying it was dropping the proposed takeover of
Australian-listed coal minter Cokal Ltd that it had
announced earlier that day.
Blumont also said it understood a Singapore broking house
had recently declared its shares as "designated securities."
That means investors cannot short-sell them, and purchases via
the broking house must be paid for upfront with cash.
Local brokerages sometimes put a trading limit on a stock if
they believe it has run up above what they believe is a fair
The decline in Blumont's shares persisted on Monday, with
the stock ending down 85 percent.
The stock only steadied on Tuesday after an announcement by
Blumont late on Monday that Alexander Molyneux had agreed to
acquire a 7.8 percent stake in Blumont and become its chairman.
The mining industry veteran has since said Blumont will continue
to invest in commodities as it aims to become "Asia's BHP."
Molyneux, who is chairman of two companies in which Blumont
holds stakes, Celsius Coal and uranium investment firm
Azarga Resources, told reporters on Tuesday that he approached
Blumont over the weekend about investing and becoming its
"I went to Taipei where I had an engagement on Saturday, on
Friday night. On the long flight there, I suddenly thought this
could be an opportunity and started phone calls on Saturday," he
BHP OF ASIA
Blumont, which was previously involved in the packaging,
property and investment sectors, started investing last year in
a number of companies in sectors such as iron ore, coal, gold,
uranium and copper.
Molyneux said the company will continue to invest in all
stages of production in the resources sector and should become a
major player in the commodities industry.
"Its strategy is not going to change, we are on our way to
become Asia's BHP," he said, referring to Australian mining
giant BHP Billiton , which has a market value of
The former resources banker with Citi and UBS, known as a
deal maker, was sacked as chief executive of SouthGobi Resources
Ltd last year after Aluminum Corp of China (Chalco)
dropped a bid to take control of SouthGobi.
He was swept out at a time when global miner Rio Tinto
, which indirectly controls SouthGobi, was
dealing with other tough issues in Mongolia around its Oyu
Tolgoi copper and gold mine.
He cautioned though that the sudden fall in share price
would limit the company's ability to raise capital.
"Blumont is funded to do what it set out to do, I don't
expect the share price to hang around here too long, but it
certainly doesn't have the same equity raising capacity as a $5
billion company," he told Reuters on the sidelines of the news
The Singapore Exchange lifted trading halts on Blumont,
along with other companies Asiasons Capital Ltd and
LionGold Corp Ltd on Sunday. But it declared the
stocks designated securities.
The companies fell sharply on Monday, then rallied on
Tuesday morning, before turning lower again in the afternoon.
Blumont shares closed flat at S$0.13, Asiasons ended down
22.7 percent at S$0.12 and LionGold was 24 percent lower at
Blumont director Hong said the company remains in an active
dialogue with the Singapore Exchange.
"We are in constant communication right now, to ensure the
exchange knows our plan, knows what we are doing. Of course this
has to be communicated not only to the exchange, but to the
investing public," he said.
Discovery Metals Ltd, an Australian copper miner
and one of Blumont's recent investment targets, became a victim
of the recent turmoil in Blumont's shares and saw its shares
sink 18 percent to an all-time low of A$0.054.
Last month, Blumont agreed to subscribe to $100 million in
convertible bonds and A$8.75 million ($8.25 million) in a share
placement in Discovery Metals. The bonds have yet to be issued.