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Leigh Creek Energy hints at Chinese takeover

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Leigh Creek Energy has encouraged journalists to “draw their own conclusions” about a potential Chinese takeover of the South Australian company, citing the final sentence of a news story on a Chinese-language news website last week.

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In an email to InDaily last week, Leigh Creek Energy head of corporate and investor relations Tony Lawry suggested we consider the final line of a 1258-character news.china.com article.

Lawry emailed again that same day, apologising if reporters were unable to translate the story into English and providing a fully translated copy, including the final line of the article:

‘It is understood that an investment bank in Hong Kong is conducting a potential acquisition of LCK for a Chinese company.’

Asked for details, Lawry referred InDaily to the company’s managing director, Phil Staveley, who said he could think of several companies that might be interested in taking over the Australian Stock Exchange-listed company.

But he was not aware of any formal plans.

“We don’t know anyone officially (preparing a takeover),” he said.

“If we did, we’d announce it.

“You know rumour and speculation is rife at the moment.”

Staveley said that being taken over wasn’t something the company’s management necessarily wanted, but that “any public company’s going to be potentially a target at any one time”.

“The only real defence – only real guard against that is good management,” he said.

“You hope you aren’t going to be taken over.”

He said he did not know why the company had sent the news.china.com article to reporters – but that “there’s always going to be takeover speculation”.

“Whether it’s real is another (thing).”

Speculation aside, he said that the company had attracted significant commercial interest since taking out advertisements in the Australian Financial Review about its low-cost fertiliser production capabilities.

“There’s a range of possibilities apart … from buying Leigh Creek (Energy),” he said.

“We’re in discussion currently with potential joint venture (partners) to produce this cheap fertiliser.

“This is going to be the cheapest fertiliser in the world.”

In mid-September, the company announced it had successfully completed a concept study for a process called in-situ gasification, which would be used to cheaply produce urea fertiliser.

“As a result of this announcement we have been approached by several large international companies in the nitrogen based fertiliser market to discuss the possibility of working together on the (Leigh Creek Energy Project),” the company’s October 31 release to the ASX reads.

“LCK (Leigh Creek Energy) continues to move forward on the basis that it can provide both pipeline quality natural gas and/or fertiliser product to the market.

“Through the China Economic and Trade Herald, China has recognised ISG (in-situ gasification) as a National Strategic Emerging industry for China and has asked LCK to assist it with various aspects of developing the Hydrogen economy in China, which is well advanced.”

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