Big picture - Why invest in Amedeo Resources PLC
Amedeo Resources PLC Snapshot
Amedeo’s first investment was in offshore fabrication. In July 2012, US$15.3 million (£10.0 million) was invested in a new marine vessel construction yard, Jiangsu Yangzijiang Offshore Engineering Co. Ltd. (“YZJ Offshore”), through a joint venture, YZJ Offshore Engineering Pte Ltd, (“YZJ JV”), with Yangzijiang Shipbuilding (Holdings) Pte Ltd (“Yangzijiang Holdings”). Yangzijiang Holdings is the largest non-state owned container shipbuilder in China and is listed on the main board of the Singapore Stock Exchange.
Amedeo’s Directors were aware that Yangzijiang Holdings wanted to diversify from shipbuilding into the offshore marine vessel construction, and was open to collaborating with partners with expertise in the sector. A joint venture, YZJ JV, with Amedeo holding a 46.5% stake, was established. YZJ JV in turn has a 40.0% stake in YZJ Offshore which has an offshore marine construction vessel yard. Amedeo has a 19.0% stake in YZJ Offshore.
YZJ Offshore’s new yard is located on approximately 1.6 million square metres of prime shorefront land in Taicang, Jiangsu Province on China’s east coast, some 50 miles north of Shanghai. This is the ideal location for the construction of a marine vessel yard due to its deep water and absence of bridges en route to the open sea.
The new yard is fully operational and has the capability to build various marine vassels including jackup rigs, semi-submussible and accommodation units, as well as the ability to build blocks for container ships and gas carrier vessels.
The new yard's first order was secured in December 2012 and was for a Le Tourneau Super 116E Class self-elevating mobile offshore drilling rig.
The rig has been built to schedule and to quality and is nearing completion.
In April 2013, Amedeo made its second investment, this time in a ferrous metals and ore wholesaler and trader, MGR Resources.
The logic behind this investment was two-fold. First, Amedeo is, indirectly through YZJ Offshore, a customer of the large Chinese steel mills and has good relationships with them. By investing into MGR, Amedeo has further cemented those relationships by becoming a supplier to the steel mills. Second, offshore vessel construction has long lead times in which, typically, cashflows are received some two to three years after orders are placed whereas wholesaling and trading commodities provides immediate cashflow.
The investment into MGR was made by acquiring a 49% stake in MGR for £30,000 (US$49,900). In addition, Amedeo provided a three year 15% coupon convertible loan to MGR of up to US$1.95 million for working capital.
MGR’s principal activity was the amalgamation of iron ore from the Middle East and Africa and onward supply to China. Given the recent decline in the iron ore price and the immediate outlook for iron ore being poor, MGR is utilising its network to explore other opportunities for broking other commodities, including into China and elsewhere.
Ghanim Bin Saad Al Saad Al Kuwari (Non-Executive Chairman)
Mr Ghanim Al Saad is the founder of Ghanim Bin Saad Al Saad & Sons Group Holdings which is one of Qatar's most successful private sector business groups with investments in more than 40 companies around the world operating in the fields of aviation, maritime, automobiles, oil & gas, real estate, manufacturing, finance & asset management, engineering, education, fitness, hotels and hospitality, information technology and telecommunications. In addition, until 2012, Mr Al Saad was managing director of Qatar Diar Real Estate Investment Company, which was established in 2005 by the Qatar Investment Authority, the sovereign wealth fund of the State of Qatar.
Lau Lian Seng Glen (Chief Executive Officer)
Mr Lau graduated from the National University of Singapore in 1989 with a BSc in Mathematics and Economics and achieved a MSc in Financial Engineering from the same university in 2001. He has over two decades of experience working in the financial sector, with a particular expertise in investment banking and fund management. He also has significant experience in the offshore infrastructure sector, having been the Deputy Chairman of PPL Shipyard Pte Ltd, one of Singapore’s pre-eminent offshore rig builders, and he was instrumental in helping to secure the Amedeo's joint-venture investment with Yangzijiang Shipbuilding (Holdings) Ltd. Mr Lau is a Director of Fulton Capital Management Limited.
Zafarullah Karim (Executive Director)
Mr Karim has over two decades of business and financial experience, including investment banking, investment and risk management, financial strategy and growing and restructuring companies. Mr Karim has been the impetus driving change and growth in several companies where he has served as a board member. He has also acted as a consultant to various businesses and entrepreneurs in relation to their financial and investment strategies. Mr Karim started his career in 1990 in investment banking with Salomon Brothers. He then worked for several years for NM Rothschild & Sons in a variety of developed and emerging markets. Mr Karim has an M.A. (Hons) in economics from the University of Cambridge.
Philippe Petitpierre (Non-Executive Director)
Mr Petitpierre is a Swiss national who holds two Masters Degrees in Environmental Sciences and Energy from the EPFL (Lausanne Institute of Technology). He represents Switzerland on the Board of IGU (International Gas Union) and is a member of the Board of Directors of EUROGAS in Brussels. Mr Petitpierre is vice-chairman of the SWISSGAS Company and of the Swiss Gas Industry Association. He is also active in the regional economy, chairing two Banks and the Economic Development Council of Canton de Vaud.
Information taken from company website 09.06.2015
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