TIDMSNRP
RNS Number : 2052J
Strategic Natural Resources PLC
10 June 2014
10 June 2014
Strategic Natural Resources plc
("Strategic Natural Resources" or the "Company")
Posting of Circular and Beaufort placing update
Posting of circular
The Board of Strategic Natural Resources has yesterday posted to
shareholders a circular ( the "Circular") convening a general
meeting, to be held at 10.00am on 30 June 2014 at the offices of
Memery Crystal LLP, 44 Southampton Buildings, London, WC2A 1AP,
details of which were announced by the Company on 06 June 2014. An
extract of the Circular, detailing the reasons for seeking an
increase in the Company's share authorities, is provided below. A
copy of the Circular is also available from the Company's website,
www.snrplc.co.uk.
Beaufort placing update
The Company has agreed with Beaufort Securities Limited
("Beaufort") to an extension of the settlement terms of the
6,250,000 Further Beaufort Placing Shares at 4p per ordinary share,
further details of which were announced on 13 May 2014, such that
Beaufort will be issued 2,500,000 new ordinary shares on 11 June
2014, for a consideration of GBP100,000 and will be issued the
balance of 3,750,000 ordinary shares on 18 June 2014, for a
consideration of GBP150,000.
For further information, please contact:
Strategic Natural Resources plc
Alexander MacDonald, Chief Executive Officer
Gabriel Ruhan, Non-Executive Director +44 (0)20 3328 5656
Allenby Capital Limited
Nominated Adviser
Nick Naylor
James Reeve +44 (0)20 3328 5656
NB: Definitions in this announcement shall have the same meaning
as defined in the Company's announcement on 13 May 2014, unless
otherwise defined herein.
Extract from the Circular
Introduction
We are writing to set out the proposed strategy of your Board of
Directors (the "Directors" or the "Board")) for the Company, to ask
the Company's shareholders (the "Shareholders") to approve
resolutions (the "Resolutions") to grant the Directors authority to
allot shares to enable them to execute this strategy and to explain
why the Directors consider that passing the Resolutions would be in
the best interest of Shareholders.
Proposed Strategy
SNR's immediate priority is to satisfy all its creditors and
thereby provide long term stability to both the Company's financial
position and its share price. Whilst the first round of funding by
Target Alliance and Beaufort Securities has gone a long way in
alleviating the situation, it is clear that additional funding is
required. The Board is currently in negotiations with several
parties to meet this end. Whilst these discussions are on-going,
the Board is reasonably confident that sufficient funding to meet
the outstanding creditors and provide sufficient working capital
for SNR and Elitheni Coal will be attained. At the same time, your
Board is considering several options in relation to bringing the
Elitheni Coal project into sustainable long term production. These
discussions involve joint venture partnerships to supply coal to
local industrial entities as well as export markets and the
possibility of building a nearby coal fired power station for the
region.
Background
On 13 May 2014, we announced GBP1,500,000 of investment into SNR
by way of equity subscriptions at 4 pence per ordinary share of 1
penny each ("SNR Shares") and various agreements with creditors
pursuant to which SNR agreed to allot SNR Shares to creditors. In
total, SNR has agreed to allot 51,000,000 SNR Shares to investors
and creditors.
In addition, as part of the extension to the repayment date of
the GBP6,000,000 loan the Company owes to Land Consultants Limited
("LCL"), the Company and LCL agreed that LCL could capitalise up to
GBP2,000,000 of the interest it is owed by the Company into SNR
Shares at a price of 4 pence per SNR Share (the "Conversion
Right"). The Conversion Right was granted conditionally upon
approval of Shareholders, on the proviso that if it was not
approved by Shareholders prior to 13 August 2014, the Company would
be in default under the terms of its facility agreement with
LCL.
On 17 December 2013, Shareholders authorised the Directors to
allot 90,000,000 SNR shares at the Company's Annual General
Meeting. To date 51,000,000 of this authority has been utilised or
is needed to satisfy the arrangements with investors and creditors
set out above, leaving 39,000,000 SNR Shares available to Directors
to allot. There is therefore insufficient authority to grant the
Conversion Right to LCL and to allow the Directors to execute their
proposed strategy.
It is therefore proposed to seek authority from Shareholders to
authorise the Directors to:
(a) grant the Conversion Right exercisable over 50,000,000 SNR Shares; and
(b) allot a further 61,000,000 SNR Shares for cash on a non pre-emptive basis.
This is in addition to the remaining existing authority to allot
39,000,000 SNR Shares. If the Resolutions were passed the Directors
would have the authority to allot a further 100,000,000 SNR Shares
representing 36.8 per cent. of the issued share capital, assuming
the Conversion Right has been exercised in full and the 51,000,000
SNR Shares the Company has committed to allot to investors and
creditors have been allotted in full.
Reasons for not carrying out a pre-emptive issue
The Directors have considered the most appropriate method to
conduct future fundraisings, including carrying out a placing and
open offer or a rights issue. The Directors concluded that the time
and costs associated with a pre-emptive offer were not in the best
interests of the Company. After careful consideration, they
concluded that the benefit of minimising the costs of any
fundraising by way of a non pre-emptive cash placing would be in
the best interests of Shareholders.
General Meeting
A notice convening the General Meeting, which is to be held at
the office of Memery Crystal LLP, 44 Southampton Buildings, London,
WC2A 1AP at 10 a.m. on 30 June 2014, is set out at the end of this
document. At the General Meeting, the following resolutions will be
proposed:
1. Resolution 1 is an ordinary resolution to authorise the Directors to:-
(a) grant LCL the Conversion Right exercisable over 50,000,000 SNR Shares; and
(b) allot and issue up to 61,000,000 SNR Shares with an
aggregate nominal value of up to GBP610,000.
2. Resolution 2 is a special resolution to empower the Directors
to issue and allot shares pursuant to the authority conferred by
resolution 1, on a non pre-emptive basis, such authority being
limited to:
(a) the grant to LCL of the Conversion Right exercisable over 50,000,000 SNR Shares; and
(b) the allotment of up to 61,000,000 SNR Shares with an aggregate nominal value of GBP610,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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