TIDMSTGR
RNS Number : 6287J
Stratmin Global Resources PLC
18 December 2015
18 December 2015
StratMin Global Resources Plc
("StratMin" or the "Company")
Posting of Circular
StratMin Global Resources Plc (AIM: STGR), London's only listed
graphite production and exploration company, announces that it has
today posted a circular to shareholders in relation to a proposed
capital reorganisation of the Company and increase in the
Directors' authority to allot shares and disapply pre-emption
rights (the "Circular"). The Circular contains a notice convening a
general meeting of the Company to approve the matters relating to
the proposed capital organisation as noted above. The general
meeting will be held at the offices of Strand Hanson Limited, 26
Mount Row, London W1K 3SQ on 6 January 2016 at 10 a.m. (the
"General Meeting"). The Circular will also be made available on the
Company's website.
Capitalised terms are appended to this announcement and have the
same meaning as provided in the Circular, unless the context
requires otherwise.
For further information please visit www.stratminglobal.com or
contact:
StratMin Global Resources Plc +44 (0) 20 3691
Brett Boynton, CEO 6160
Strand Hanson (Nominated & Financial Adviser) +44 (0) 20 7409
Rory Murphy / James Spinney / Ritchie Balmer 3494
Beaufort Securities (Broker) +44 (0) 20 7382
Jon Bellis 8300
Blytheweigh (Financial PR) +44 (0) 20 7138
Camilla Horsfall/ Megan Ray 3204
Background to the Resolutions
The Existing Ordinary Shares have in recent months frequently
been trading on AIM at a price below their nominal value of 4 pence
per share. The issue of new shares by an English company at a price
below their nominal value is prohibited by English company law and
accordingly the ability of the Company to raise funds by way of the
issue of further equity has been inhibited. Accordingly the
Directors are seeking Shareholders' authority to implement the
Capital Reorganisation to create a differential between the nominal
value of the ordinary shares in the capital of the Company and
their market price to facilitate future share issues.
To give effect to the Capital Reorganisation the Articles will
need to be amended to make changes to allow the creation of the
Deferred Shares. These amendments will also require Shareholders'
approval at the General Meeting.
Capital Reorganisation
As at 17 December 2015, being the latest practicable date prior
to the publication of this announcement, the total issued share
capital of the Company was GBP6,045,975.64 divided into 151,149,391
Existing Ordinary Shares.
It is proposed that in relation to the Company's share capital
to effect the Capital Reorganisation, that each of the 151,149,391
Existing Ordinary Shares will be subdivided and reclassified into
one New Ordinary Share of 0.01 pence and one Deferred Share of 3.99
pence each.
As a consequence of, and immediately following, the Capital
Reorganisation becoming effective each Shareholder's holding of New
Ordinary Shares will be the same as the number of Existing Ordinary
Shares held by them on the Record Date. Therefore, each
Shareholder's proportionate interest in the Company's issued
ordinary share capital will, and thus the aggregate value of their
holding should, remain unchanged as a result of the Capital
Reorganisation.
The New Ordinary Shares will continue to carry the same rights
as attached to the Existing Ordinary Shares. The Deferred Shares
will carry the rights as set out in the Articles and as summarised
below.
The last day of trading on AIM in the Existing Ordinary Shares
is expected to be 6 January 2016. If approved, following the
Capital Reorganisation becoming effective, and assuming no shares
are issued between 17 December 2015 (being the latest practicable
date prior to the printing of the Circular) and the date the
Capital Reorganisation becomes effective (expected to be 10 a.m. on
6 January 2016), the Company's issued ordinary share capital will
still comprise 151,149,391 New Ordinary Shares.
If the Capital Reorganisation is approved, the New Ordinary
Shares will be admitted to trading on
AIM.
No new share certificates representing the New Ordinary Shares
will be sent to Shareholders who hold Existing Ordinary Shares in
certificated form. Accordingly, share certificates for the Existing
Ordinary Shares will remain valid, and will only be replaced by
share certificates for New Ordinary Shares when the old share
certificates are surrendered for cancellation following the
transfer, transmission or other disposal of New Ordinary
Shares.
Shareholders who hold their Existing Ordinary Shares in
uncertificated form through CREST should expect to see the security
description updated for the existing ISIN number (GB00B9276C59), in
order to reflect their holding in New Ordinary Shares.
The Deferred Shares created will be effectively valueless as
they will not carry any rights to vote or dividend rights. In
addition, holders of Deferred Shares will only be entitled to a
payment on a return of capital or on a winding up of the Company
after each of the holder of a New Ordinary Share has received a
payment of an amount equal to the amount paid up on that share
after repayment in respect of each New Ordinary Share of the
capital paid up on it and the further payment to holders of New
Ordinary Shares of GBP1,000,000 on each New Ordinary Share. The
Deferred Shares will not be traded on AIM or listed and will not be
transferable other than as specified in the proposed Article
3.3.3.2. No share certificates will be issued in respect of the
Deferred Shares, nor will CREST accounts of Shareholders be
credited in respect of any entitlement to Deferred Shares.
In connection with the Capital Reorganisation, the Company also
proposes to amend the Articles to include the rights and
restrictions attaching to the Deferred Shares, as set out above.
The Resolution pertaining to the Capital Reorganisation and
associated amendment of the Articles will be proposed as a special
resolution, numbered Resolution 2.
Share Authority Increase
The proposed authority to issue New Ordinary Shares for cash on
a non-pre-emptive basis is to give the Board flexibility to
undertake a future fundraising, when market conditions are
appropriate, during the course of 2016 without the financial and
time expense of having to convene a further general meeting. The
Board is proposing to increase the authority to allot shares and
disapply pre-emption rights over a total of 48,000,000 New Ordinary
Shares, representing approximately 32 per cent. of the Company's
currently issued share capital. When combined with existing unused
authorities, and assuming the Resolution is approved, the Board
will have authority to allot shares and disapply pre-emption rights
over, in aggregate, 42 per cent. of the Company's currently issued
share capital. At this point in time, the Board envisions that the
net proceeds from any fundraising undertaken pursuant to this
authority will be used, in conjunction with part of the cash
received and to be received pursuant to the investment agreement
with Bass Metals Ltd., to fund immediate capital expenditures and
provide for expanded working capital.
In order to conserve cash resources, part of this proposed
authority will also be used to settle unpaid cash salaries for
certain of the Board and senior management. The price that these
New Ordinary Shares will be issued at will be set according to the
price that the fundraising referred to above takes place at.
In order to further conserve cash resources, part of this
proposed authority will also be used to settle monthly cash
salaries coming due in early 2016 for certain of the Board and
senior management until the earlier of the exercise of the
incentive option granted to Bass Metals Ltd. and 30 April 2016.
Please see the Company's announcement dated 4 December 2015 for
further information on the transaction with Bass Metals Ltd.
including details on the incentive option.
These New Ordinary Shares will be issued monthly in arrears and
a price determined by the 5-day volume weighted average price
(VWAP) prior to the end of each respective month. Part of the
proposed authority will also be used to issue shares due to the
Company's Chief Executive Officer, Brett Boynton, pursuant to his
employment contract with the Company. Mr. Boynton is due a total of
GBP200,000 in shares, over a two year period, payable in arrears in
four six-monthly tranches of GBP50,000 each at a price of 6 pence
per New Ordinary Share. The total number of shares to be issued to
Mr Boynton under this arrangement is expected to be 3,333,333.
Finally, the Board also intends to use part of this authority to
allot and issue the corresponding number of New Ordinary Shares to
certain of the holders of existing Options and Warrants in the
event of the exercise of such Warrants and Options, totaling
11,356,250.
The Board is seeking an extension to their authority to issue
shares as set out in Resolutions 1 and 3 of the Notice of General
Meeting.
Related Party Transaction
The issue of New Ordinary Shares to certain of the Board and
senior management to settle monthly cash salaries coming due in
early 2016 is considered a related party transaction under the AIM
Rules. The independent directors (being the Board, save for those
receiving New Ordinary Shares in lieu of cash salary) consider,
having consulted with Strand Hanson Limited, the Company's
nominated adviser, that the terms of the transaction are fair and
reasonable insofar as Shareholders are concerned.
Irrevocable Undertaking
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