TIDMLRL
RNS Number : 9433N
Leyshon Resources Limited
13 September 2013
Leyshon Resources Limited
13 September 2013
CORPORATE RESTRUCTURE
SEPARATION OF ENERGY AND MINERAL ASSETS
Leyshon Resources Limited (ASX/AIM: LRL) (the Company or Leyshon
Resources) is pleased to announce that it plans to undertake a
corporate restructuring to effect the separation of its energy and
mineral businesses.
Subject to necessary shareholder and regulatory approvals, the
Company intends to demerge the Company's energy assets comprising
the Company's interests in the Zijinshan Gas Project held through
its wholly owned subsidiary Pacific Asia Petroleum Limited (PAPL),
along with cash reserves of approximate US$35 million, into an
energy focused vehicle, Leyshon Energy Limited (Leyshon Energy).
The demerger will be affected via a pro-rata in-specie distribution
of 100% of shares in Leyshon Energy to the Company's shareholders
(Energy Separation).
Leyshon Energy will apply for listing on the ASX and AIM and has
appointed Cantor Fitzgerald Europe as its Nominated Adviser to
assist with an application for admission to trading on AIM. The
Energy Separation will not be implemented until Leyshon Energy is
able to satisfy the admission requirements of the ASX and/or
AIM.
Non-Executive Chairman John Fletcher commented:
"Our aim in these restructurings is to allow shareholders to own
an interest in two listed companies, Leyshon Energy and Leyshon
Resources, at no additional cost to their original investment.
Leyshon Energy will be focussed on the exploration and
commercialisation of the Zijinshan project and has appointed a
Board of Directors with an enviable track record in acquisition
growth looking to exploit opportunities in the oil and gas
sector.
Leyshon Resources will be looking to take advantage of the
currently depressed asset values in the minerals sector with a view
to collaboration with Chinese and other buyers.
Both companies will be well funded, with strong management teams
looking to create significant shareholder value."
Leyshon Resources' Energy Assets
The Company has an interest in the Zijinshan Gas Project,
through PAPL, which was acquired in August 2012. Since the
acquisition the Company has been focused on conducting an
accelerated exploration and appraisal programme on the project.
The Zijinshan Gas Project comprises the Zijinshan Production
Sharing Contract (PSC) located on the eastern fringe of the Ordos
Basin in central China, covering an area of 705 km(2) . The PSC is
with China National Petroleum Corporation (CNPC), which is the
largest oil and gas producer in China.
PAPL is the operator of the PSC and has a 100% working interest
in the exploration phase of the PSC. CNPC has the rights to back in
to the project with a 40% interest at the development stage. The
PSC is valid for 30 years and expires in 2038.
In the financial report for the six months ended 31 December
2012 (Financial Report), the Company disclosed that a loss of
US$3.1 million was attributable to the activities of PAPL and its
subsidiaries. As at 31 December 2012, in respect of the acquisition
of PAPL, an asset of US$5.3 million was recognised in the Financial
Report. A copy of the Financial Report can be found on the
Company's website www.leyshonresources.com.
Leyshon Energy Board
Following the Energy Separation, the Leyshon Energy board of
directors will comprise:
Mr John Manzoni as Non-Executive Chairman
Mr Manzoni is a highly experienced international oil and gas
executive. During his 24 years with BP he held a number of
positions including Chief Executive of Refining and Marketing,
spanning six businesses across 100 countries.
He became a leading member of the executive team that helped BP
grow to become one of the world's largest energy companies. He
managed the integration of acquired companies, including the
origination and leading of the acquisition of Amoco, then the
largest industrial merger in business history.
He was Chief Executive Officer of Talisman Energy from 2007-2012
and led the company through a period of significant growth to a
market capitalisation of US$30 billion. He was named International
Business Leader of the Year in 2010 by the Canadian Chamber of
Commerce. He is currently a Non-Executive Director of SAB
Miller.
Mr Manzoni currently resides in the United Kingdom.
Mr Paul Atherley as Managing Director
Mr Atherley has over 25 years' industry operating experience. He
was an Executive Director of the Investment Bank arm of HSBC
Australia where he undertook a range of advisory roles in the
resources sector.
During this period he completed a number of acquisitions and
financings of resource projects in Australia, South East Asia,
Africa and Western Europe.
He is an experienced Managing Director with well established
relationships in China as well as the London and Australian capital
markets. Mr Atherley has been in Beijing since 2005. He is the Vice
Chairman of the China Britain Business Council and currently serves
on the Executive Committee of the European Union Energy Working
Group in Beijing.
Mr Atherley currently resides in China.
Mr Kim Howell as Non-Executive Director
Mr Kim Howell is a highly experienced international oil and gas
executive with 40 years of experience with BG Group plc and
Atlantic Richfield Company (ARCO).
During his 25 years career with ARCO, he held various management
positions in Mergers & Acquisition, Assets Management,
Reservoir Engineering, Strategic Planning and Investor
Relations.
He was Vice President for Commercial, responsible for BG Group's
global commercial functions. He became Group Head of the Mergers
& Acquisition department of BG Group plc and was responsible
for over 90 transactions totalling more than $22 billion.
He has a BSc in Mechanical Engineering from Stanford University
and an MSc in Petroleum Engineering from the University of Southern
California.
He is a member of the Institute of Directors, the Association of
International Petroleum Negotiators and the Society of Petroleum
Engineers. He has been a director of BG subsidiary companies and is
currently a director of a UK property management limited
company.
Mr Howell currently resides in the United Kingdom.
Following the implementation of the proposed demerger, Leyshon
Energy proposes to seek to make an appointment of a suitably
qualified Executive Director with relevant skills and experience to
its board.
The Proposed Energy Separation
Leyshon Energy was incorporated on 27 March 2013 under the laws
of the British Virgin Islands and is a wholly-owned subsidiary of
the Company.
In order to effect the Energy Separation, the Company proposes
to undertake an initial corporate restructure whereby:
(i) ownership of the entire issued share capital of PAPL will be
transferred from the Company to Leyshon Energy (representing the
Company's interest in the Zijinshan Gas Project) in consideration
for the issue by Leyshon Energy of shares of Leyshon Energy
(Leyshon Energy Shares) to the Company; and
(ii) the Company will subscribe for additional Leyshon Energy
Shares in consideration for a cash payment of US$35 million to
Leyshon Energy.
Subject to being able to satisfy the admission requirements of
the ASX and/or AIM, the Company then intends to undertake a capital
reduction (i.e. a return of capital) by way of a pro rata in-specie
distribution of the entirety of the Leyshon Energy Shares whereby
each eligible shareholder of the Company will receive Leyshon
Energy Shares.
Leyshon Resources' Shareholder Approval
The Company will post a notice of meeting/circular to
shareholders shortly in order to obtain shareholder approval of the
proposed Energy Separation, and of an amendment to the Company's
investing policy so as to exclude from it the pursuit by the
Company of acquisition and investment opportunities in the oil and
gas sector. The notice of meeting/circular will contain further
details of the Energy Separation and will also contain a technical
report on the energy assets. A further notification will be made at
that stage.
The shareholder meeting is expected to be held in October, 2013.
The record date for the Energy Separation in-specie distribution
will be determined by the Company and announced in due course.
After completion of the Energy Separation, the Company will hold
cash resources of approximately US$3 million (unaudited), and will
be an investing company under the AIM Rules under an amended
investing policy, and would no longer consolidate PAPL in its
future financial reporting.
Relief against Prospectus for Leyshon Energy Shares
The Company has lodged an application to the Australian
Securities and Investments Commission (ASIC) for relief consistent
with Regulatory Guide 188 such that the Company will not be
required to issue a prospectus in relation to the Leyshon Energy
Shares the subject of the proposed in-specie distribution. If ASIC
relief is granted, the Company's shareholders will be provided with
all necessary information about the Leyshon Energy Shares in the
explanatory statement accompanying the notice of meeting/circular.
If ASIC relief is not granted, the Company will issue a prospectus
in respect to Leyshon Energy and the Leyshon Energy Shares being
distributed with such prospectus being despatched to the Company's
shareholders with the notice of meeting/circular seeking approval
for the distribution in specie of the Leyshon Energy Shares.
Benefits of Energy Separation to Leyshon Resources'
Shareholders
The Directors believe that the principal advantages to
shareholders of the proposed Energy Separation are as follows:
-- Shareholders will continue to retain their current indirect
interest in the Zijinshan Gas Project through their pro rata
shareholding in Leyshon Energy.
-- Shareholders will retain their shareholding in the Company in
the same proportion in which it is held prior to the implementation
of the proposed Energy Separation.
-- It will allow the Company to focus on the Mt Leyshon Gold
Project, and other mineral investment opportunities whilst enabling
Leyshon Energy to focus on the Zijinshan Gas Project as well as
actively seeking other investment and acquisition opportunities in
the oil and gas sector in China and elsewhere.
-- It provides a strategic opportunity to develop Leyshon Energy
as a stand-alone company which can continue to explore and
commercialise the Zijinshan Gas Project and should enable a more
transparent market value to be placed on the Zijinshan Gas
Project.
-ENDS-
For further information please contact:
Leyshon Resources Limited
Paul Atherley - Managing Director
Tel: +86 137 1800 1914
admin@leyshonresources.com
Cantor Fitzgerald Europe
David Porter/Rick Thompson (Nominated adviser)
Richard Redmayne (Corporate broking)
Tel: +44 (0)207 107 8000
Pelham Bell Pottinger
Charles Vivian /James MacFarlane
Tel: +44 (0)20 7861 3232
This information is provided by RNS
The company news service from the London Stock Exchange
END
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