Blumont Says Former SouthGobi CEO Molyneux to Become Chairman

Blumont (BLUM) Group Ltd. named former chief executive officer of SouthGobi Resources Ltd. (SGQ) as chairman, spurring a rebound in Blumont stock in Singapore trading after it plunged by a record yesterday.

Alexander Molyneux will buy 135 million Blumont shares and formally assume the role of chairman after the transaction is completed, the company said in a statement yesterday. Molyneux was ousted as CEO of coal miner SouthGobi in September 2012. Prior to that he was managing director, head of metals and mining investment banking, Asia Pacific for Citigroup Inc.

Blumont jumped 73 percent, the most ever, reversing two-days of losses that shaved S$4.9 billion ($3.9 billion) from its market value as restrictions were placed on the stock. Molyneux will become chairman as Blumont, which said this month it has held talks with 20 potential takeover targets or partners since December, seeks to expand its minerals and energy assets.

“The new development would appear that Blumont is doing everything they can to instill confidence in the company,” Kelly Teoh, a market strategist at brokerage IG Markets in Singapore said. “This should stem further selling and stabilize the share price.”

Blumont rallied as much as 131 percent and was up 73 percent at 22.5 Singapore cents at 10:12 a.m. local time. Before the rout began Oct. 3, the stock had advanced more than tenfold this year.

The final price paid by Molyneux will be between 20 Singapore cents and 60 Singapore cents a share, Blumont said. The transaction is expected to close within 30 days.

‘Resources Champion’

“This is a company fast on its way to being Asia’s first diversified natural resources champion,” Molyneux, who is based in Hong Kong, said in the statement. “With the unusual share price drop, this is right time to get involved.”

Blumont last week scrapped a deal to buy Australia’s Cokal Ltd. (CKA) for S$146 million the same day it announced the deal after the share plunge on Oct. 4 affected the commercial terms discussed with the the target. Trading was halted along with commodity investors LionGold Corp. Ltd. and Asiasons Capital Ltd. (ACAP) by the Singapore Exchange as it requested explanations for large share price declines. The exchange said Oct. 6 shares of the three companies have been declared designated securities, prohibiting investors to sell them unless they hold the same quantity of stock.

Molyneux was fired by SouthGobi, which mines steelmaking coal in Mongolia, eight days after Aluminum Corp. of China Ltd. dropped a takeover bid. The offer was dropped after Mongolia passed a law restricting foreign state-owned companies from controlling key assets.

Blumont has stakes in Azarga Resources Ltd. and Celsius Coal Ltd. (CLA) and Molyneux is chairman of both companies, it said.

To contact the reporters on this story: Michelle Yun in Hong Kong at; Jonathan Burgos in Singapore at

To contact the editor responsible for this story: Andrew Hobbs at

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