ERA raising faces shareholder backlash
PERTH (miningweekly.com) – The Australian Takeovers Panel has received an application to prevent uranium miner Energy Resources of Australia (ERA) from undertaking its proposed A$476-million renounceable entitlement offer.
The miner last week announced plans for a fully underwritten 6.13-for-1 pro-rata renounceable entitlement offer, priced at 15c a share, with some 3.17-billion shares to be issued under the offer.
Mining major Rio Tinto, which holds a 69.4% interest in ERA, has said that it would subscribe for some A$326-million worth of shares under the entitlement offer.
ERA shareholder Zentree Investments has now applied to the Takeovers Panel to halt the raising, claiming that minority shareholders were not being given ‘reasonable or equal opportunity’ to participate in the raising, with the benefits of the raising flowing towards Rio.
Zentree also said that there had been inadequate disclosure as to the need, size and urgency of the entitlement offer, and that there was no ‘serious dispersion expectation for the entitlements or the new shares’.
The company has applied to the Takeovers Panel to delay the entitlement offer, prevent the closing of the offer period, and to prevent ERA from issuing any new shares in connection with the entitlement offer earlier than seven days after the application has been determined.
Zentree was seeking final orders that the entitlement offer should be cancelled, and that any underwritten agreement for the raising be terminated without any liability or penalty to EAR, and that ERA should be restrained for a 12 month period from entering into any transaction or issuing shares that would result in a person obtaining voting power of more than 20%, or increasing an existing voting power above 20%.
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