Kazakhstan Refinery Owner Geo Point Technologies To Spin Off Domestic Engineering Business

When writing about a company whose key asset is in Kazakhstan, it is difficult to avoid Borat jokes, but we pledge to try our best. Geo Point Technologies(GNNC) has not traded since July 10, 2012, probably because it has one of the biggest bid/ask spreads we have ever seen(last trade: $1.70, bid, $.022, ask: $8.99). With just over 30 million shares outstanding, at the price of its most recent trade, it has a market cap of over $50 million. One third of the company is owned by Chairman Gafur Kassymov.

Kassymov joined the company, which had been involved in a very small way in environmental and engineering consulting in the United States, when the company purchased his Kazakhstan refiner in 2010 for over 26 million shares, the majority of the company’s outstanding stock.  According to the company’s most recent 10-Q, the Kazakhstan operations have been struggling, unable to get a supply of crude oil

Revenues from our refining segment for the three months ended September 30, 2012, were $0, compared to $24,459 during the comparable prior period in 2011. The decrease in revenues was primarily due to sporadic refinery operations from the inconsistent availability of crude oil.

Since then, the company has announced a non-binding letter of intent to purchase RTS Oil, a Kazakhstan oil wholesaler and retailer which would, with its refinery, give it a vertically integrated operation.  The company hopes the acquisition will be completed in the first quarter of 2013, but there is a long way from letter of intent to close, and there are no guarantees, nor is there any indication of the price to be paid or the source of financing.

More relevant to us(this, after all, being stockspinoffs.com), the company tersely announced plans to spin off GeoPoint Resources. The record date for the taxable spin off will be January 17,2013. Although the press release is short on detail, the company has filed significantly more information with the SEC. Shareholders will receive one share of the new company for each share of the parent which they already own.  Though there is no ticker yet, it is likely the company will trade, infrequently as its parent, on the pink sheets.

GeoPoint Resources will have 1 employee, founder William Lachmar. It appears it is basically his consulting business, though his salary and share ownership have been minimal. It appears it is cash flow positive, but does not really have any material growth ahead.

No question there are  a lot of interesting pieces here. Interesting in the sense that watching lions eat their prey is interesting. There does, however, appear to be nothing worth investing in. Move along, folks.

Disclosure: The author has no position in any stock mentioned.