Two companies holding a combined 75.1% share in Levers Solomons Limited (LSL) have voiced concerns about the proposed $90 million Alternative Transaction.
Orbis Commodities Pty Ltd (Orbis) indirectly owns 37.55% of LSL, while its joint venture partner, Overseas Shipping Trading and Investment Pty Ltd (OSTI), holds an additional 37.55%.
The remaining 24.9% of LSL is owned by Lavukal Investment Company Limited.
Orbis and OSTI possess valuation reports on LSL’s fixed-term estate land interests (the “Land Holdings”), commissioned on behalf of the Solomon Islands Government (SIG).
These reports, prepared by an Australian firm managing the Deed of Company Arrangement (DOCA) Transaction for SIG, provide the following valuations:
- The Land Holdings are valued at approximately $1.2 billion SBD (AU$229,112,000).
- The Companies’ combined 37.55% interest in the Land Holdings is valued at $476 million SBD (AU$86,031,500).
- The proposed Alternative Transaction, however, is set at $90 million SBD (AU$16,465,000).
In an email to the Solomon Star, Mike Willesee argued that the Alternative Transaction grossly undervalues the Companies’ interest, making it subject to potential injunction or reversal.
Willesee said that the transaction does not adequately address or compensate the Companies for their 37.55% stake, leaving them and their stakeholders at a financial disadvantage.
“The proposed amount in the Alternative Transaction is insufficient, offering no funds to the Companies, thereby undermining their interests and those of their stakeholders,” Willesee said.
“For any transaction to transfer control of the Land Holdings to SIG, it must meet this essential requirement.”
Willesee continued, stating that SIG’s failure to address these interests could lead to legal challenges against the Alternative Transaction.
He affirmed that SIG had previously committed to the DOCA Transaction and that the Companies’ liquidators are ready to proceed with it.
According to Willesee, the DOCA Transaction is the only deal that adequately meets the required stakeholder interests by establishing a Deed Fund, compensating the Companies for their interests in LSL and the Land Holdings.
In response to the Commissioner of Lands’ claim that SIG would be “paying other people’s debts,” Willesee clarified that this assertion is inaccurate and reflects a misunderstanding of the DOCA Transaction.
“While the Deed Fund is based on claims from the Companies’ creditors, it is actually the minimum amount SIG must pay to acquire Orbis and OSTI’s 75.1% shareholding in LSL, thus gaining control of the Land Holdings,” he explained.
Willesee further noted that while the Deed Fund will be distributed by the Companies’ liquidators according to Australian law, its primary purpose is to facilitate SIG’s acquisition of LSL and its assets.
Earlier, Prime Minister Jeremiah Manele announced a $140 million SBD buy-back of prime land jointly owned by LSL and Russell Island Plantation Estate Ltd (RIPEL).
This is going to be funded through Treasury Bonds raised from State-owned Enterprises, including Solomon Ports and Solomon Power.
According to the Companies’ liquidators, SIG has reaffirmed its commitment to the DOCA Transaction, most recently on October 23, 2024.
By Eddie Osifelo
Solomon Star, Honiara
