We longs need to insist the LLEN find a buyer for the company and salvage what we can. Management has proven they can't handle the situation(s) that have occurred over the past few years and it's time to find a buyer who can. I still believe the company is real although there were some obvious misrepresentations made by them. We cannot let this thing linger for years and lose all the value that has built up in it. Market cap is now less than 10% of book value! Any thoughts?
I have a bit of time this afternoon and read your post. I have addressed this before, but will do it again for your benefit.
Yes, it is possible to sell all or part of LLEN's Chinese operations, but I seriously doubt that you as a shareholder of the US holding co, would benefit much, if at all, from the transaction.
First, the buyer would need to be a current insider and/or a person with access to Capital in China, and he/she would have to be a Chinese national. The reasons for this are or should be obvious, but to restate them, there is no US bank, or investment bank that would touch this with a ten foot pole.
Currently, borrowed money is very, very hard to find in China, especially for coal assets as lenders have all been severely burned on past transactions.
Secondly, there is substantial debt associated with the so called subsidiaries, much of which appears to be reported ,but their may well be more that is not. However in any case the debt would have to factor in any sales price and it, in addition to addition to transaction costs and the still depressed coal market along with the fact that the Chinese owner would have most of the control and approval authority over any transaction, makes a successful deal difficult, if not impossible.
Keeping in mind that what you have are agreements, not real ownership and either party, should they not fulfill the conditions of the agreement, would make the agreement void or subject to dissolution regardless of any attempt to transfer the agreement to another party.
All this said, it is still possible, but it is a remote possibility and the benefit to a US shareholder is unlikely unless we are talking about pennies per share.
I hate to agree with madanal, but he brings up some very salient points about the current situation. Selling a company is not like flipping off a light switch. It takes time and effort, not to mention good timing and good luck. However, Jincai Yang has a great deal of experience in the Chinese coal industry. He probably has a very thick Rolodex and he is also politically connected. I've always had a hunch that he was brought in to eventually broker a sale so that Lee could cash out and retire. The current legal situation has complicated things to an even greater degree. So, who knows what will happen ?
The original message seems to imply that the current management is incompetent. I don't hold that view. Fong is not as dynamic as Lee, but he is solid and responsible. I think Yang is a top drawer manager. Although Lee is officially out of the company, I'm sure he is passing on a lot of information to assist. Keep in mind that the officers and most of the directors hold significant amounts of stock. They are going to work as hard as they can, considering that their best interests are the same as the company's.
MY best advice is to pour yourself a drink and curl up in front of the T.V. We'll know something about the state of things when the year-end financials are released.