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Stock Commentary

Apollo Global Capital suspension lifted after further disclosure about Poet Blue stake

Merkado Barkada
Apollo Global Capital suspension lifted after further disclosure about Poet Blue stake

As covered yesterday, Apollo Global Capital [APL 0.09] was suspended after it used the proceeds of its recent FOO to purchase a 49% stake in Poet Blue, a company registered in Singapore that owns just one asset: the MB Siphon 1.

Barkadans will remember that APL conducted the FOO specifically to make this investment in Poet Blue. Barkadans will also remember that APL has said that the MB Siphon 1 was ready to start production, saying at various times that the ship was “in position” and that there were no technical, permit-based, or practical reasons that would prevent the MB Siphon 1 from doing its work.

APL even said at one point that the only thing holding the MB Siphon 1 back was the rough weather caused by a passing storm. That was back in February.  Yesterday, APL’s disclosures provided additional information about Poet Blue, the company partially-owned and directed by the brother of an APL director and shareholder. The PSE provided notice that it would lift APL’s suspension at 10:30am this morning due to APL’s satisfaction of the comprehensive disclosure rule.


MB BOTTOM-LINE

While the transaction may have been conducted at arm’s length in accordance with APL’s related party policy from a valuation and fairness perspective, that doesn’t mean that certain aspects of this deal were in the best interests of minority shareholders.

For example, when investors and traders purchased stock in APL back in January and February based on APL’s statements that the MB Siphon 1 was moving into position and would start operations in February, and that the only thing keeping the MB Siphon 1 from starting operations were the strong waves caused by the storm, what did APL’s management know about this deal that we did not?

Did it know that bad weather aside, the MB Siphon 1 would not be used in operations until APL could raise additional money from investors through a FOO, and invest the proceeds in Poet Blue? If it didn’t know about this precondition at the time, but later came to find this out, why didn’t the APL management team provide a disclosure to correct the statements it had made previously?

If the FOO and the investment in Poet Blue were not preconditions to starting operations, then what has kept the MB Siphon 1 from starting operations all this time? Has bad weather kept the ship in safe harbor for the past 8 months? Has some other issue cropped up that was not revealed in any of the company’s previous disclosures? In the FOO prospectus, APL even says that the MB Siphon 1 has been in position since April, and has completed all the permits and preparations to begin operations.

Anyare, APL?

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