Tigers Realm Coal (ASX:TIG) – a now deeply illiquid coal mining smallcap formerly based in Russia – has confirmed the sale of its assets will go ahead.
While that news has been floating around for a while now, on Friday TIG confirmed its buyer – APM-Invest, backed by Russian billionaire Mark Buzuk – has provided a waiver not to terminate the deal.
In other words – it’s now about as confirmed as you can get, especially after TIG shareholders already approved the deal in the ancient past of H1CY2024.
The deal is good news for shareholders in that they won’t be left holding an entirely empty bag – worth noting, shares were 2.7cps in October of 2021, months before the Russian invasion. They’re currently 0.3cps.
It should be noted here that Tigers Realm Coal is a fairly small company as far as miners go. But for anyone looking more at the geopolitical macro of Australia’s sanctions regime, the deal could be considered eyebrow-raising.
Tigers Realm didn’t start the war, and it definitely didn’t want it. After all, they’re selling off a project for US$49M that could easily be worth more. Such is the more boring side of the nature of war.
But Mark Buzuk’s involvement outright complicates the narrative of Australia’s termination of trade ties with Russia. (To any TIG shareholders reading, don’t worry – I’m ultimately for common sense deals between businesspeople.)
Tigers Realm Coal is itself backed by Australian billionaire Paul Little and he was told by the Federal Court in April this year the project wasn’t kosher. Russia invaded Ukraine, Australia has sanctions on Russia, those numbers don’t add up.
The issue is that Tiger’s Russian-based subsidiaries were paying taxes to the Russian government for two years while Russia committed war crimes across Ukraine.
Those subsidiaries continued to pay taxes as Russia was tactically embarrassed by Ukraine, and kept paying taxes while the Russians managed to throw so many young men into a meat grinder they effectively jammed the machine, giving them a foothold in Ukraine that hasn’t budged since.
So you can see why the Federal Court effectively had a very public word with Paul Little. (They also ordered him to pay costs for the court action he kicked off trying to keep the mines in his hands, which, to be fair, is fair enough.)
But the Australian coal-miner now finds itself in yet another strange geopolitical dance: it’s set to avoid breaking anti-Russia sanctions by selling a revenue-generating coal mine to a Russian billionaire.
That’s always been the case, but APM-Invest’s waiver on Friday turns proposition to prosperity.
You could say “just because he’s Russian and a billionaire doesn’t mean anything,” but I’d go so far as to call you naive.
According to Transparency International, through Buzuk’s involvement, the deal will give at least some kickback to the Russian Direct Investment Fund (RDIF), very much so a Kremlin-linked entity.
(Again, to TIG shareholders telling me to shutup under their breath, I note the US$49M deal isn’t the world’s most game-changing sum as far as miners go, and it’s not like the deal will let Russia buy a new fleet of jets.)
There’s also the fact that in Russia, every billionaire has some kind of tie to the Russian government, so I’ll admit there could be some hand-wringing, here. Sucks about Ukraine, though.
To be sure, however, the same thing is true for billionaires everywhere. Once you get that rich, you basically control parts of the economy, and after.a while, politicians get your phone number. The same is true in Australia: after all, we’ve got Gina Rinehart.
TIG last traded at 0.3cps.
Join the discussion: See what HotCopper users are saying about Tigers Realm Coal and be part of the conversations that move the markets.