Bowen Energy saga returns

WHILE Bowen Energy awaits the results of an independent expert’s report on Bhushan Steel’s $A8.6 million on-market takeover offer, some small Bowen shareholders are concerned the Queensland coal explorer is not meeting reporting requirements.

Blair Price

Despite some solid share price appreciations from listed coal explorers this year, the Indian steelmaker’s bid for Bowen of 10c per share is 4c off the 14c per share offer it made back in July 2009.

But Bowen also reported a net loss of $11.24 million for the recent financial year, worse than the $5.13 million net loss in the previous year.

However, the bulk of this recent loss came from asset write-downs with a total of $9 million in impairment losses noted in Bowen’s annual report.

The annual report separately revealed there was no exploration expenditure at all in 2009-2010 financial year, compared to an exploration spend of $57,500 in the previous 12 months.

While a report in the Australian Financial Review on Tuesday mentioned that Bowen had “multiple rigs onsite since 2008”, Bowen executive director Mark Sheppard told ILN the company has just had one rig since this time.

The recent spate of heavy rain in the state has also held up drilling in Bowen’s South Blackwater Project.

“We have been stopped for over three weeks now,” Sheppard said.

He added that the planned holes in the permit, EPC 1045, were very deep so it took more than two weeks to drill a hole.

Bowen restarted drilling at the Katrina prospect in the project in April.

Sheppard did not comment on the efforts made by minority shareholders to criticise the company.

The minority shareholders are raising issues with the Australian Securities Exchange over Bowen’s recent annual report.

One of them, Geoff Le Serve, suspects the report detailed fewer tenements than the company actually held and he is pursuing this angle with the ASX.

He told ILN he is still awaiting an ASX response to his complaint.

The minority shareholders are concerned that Bhushan’s offer undervalues Bowen.

But Bowen is not making any recommendation to shareholders until the outcome of the independent expert report on the offer, to be made by Deloitte Corporate Finance.

Bhushan already owns a 59.64% stake in the explorer.

The joint venture partner of Bowen increased its stake from 22.23% to 58.81% through its takeover offer last year.

The initial offer last year got the attention of the Takeovers Panel, which forced a second independent expert’s report to be commissioned.

One question unresolved from the panel’s investigations is about the association between the Indian steelmaker and a Mauritius-based company, Savni Holdings.

Bowen holds some Queensland permits adjacent to areas held by key coal companies, including BHP Billiton, Anglo Coal and Macarthur Coal.

The company owns whole or partial stakes in at least 19 tenements.

Bowen shares last traded at 10.5c.