TIDMNBR
RNS Number : 1070P
Namibian Resources PLC
29 September 2011
For Immediate Release
29 September 2011
Namibian Resources PLC
(the "Company")
Proposed conversion of Directors' loans to new Ordinary
Shares
Details of the Proposed Conversion
Namibian Resources PLC (the "Company") announces that it is
proposing to issue a total of 17,518,500 new Ordinary Shares of
GBP0.01 each ("Shares") at a price of 3.5p per Share, pursuant to
the conversion of GBP613,147 of unsecured loans ("Conversion").
The Company has today written to Shareholders to provide the
background to and reasons for the Conversion, and to give notice of
a General Meeting convened for Friday 28 October 2011, at which
Resolutions to effect the Conversion will be put to
Shareholders.
For a considerable time the Company has been financed by
interest free loans from the Directors and a company associated
with one of them. At the present date, the outstanding amount of
these loans is GBP775,725, of which GBP613,147 is proposed to be
converted as set out below. This is the maximum amount which can be
converted without giving rise to the requirement for a bid for the
Company by those Directors acting in concert (see below) in
accordance with Rule 9 of the Takeover Code.
Shares
Loan amount to be
GBP issued
Lord Sheppard - Chairman 274,725 7,849,286
Didgemere Consultants Limited (company controlled
by Lord Sheppard) 8,422 240,643
Brian Moritz - Non Executive Director 325,000 9,285,714
Tony Carlton - Chief Executive Officer 5,000 142,857
------------ -----------
613,147 17,518,500
============ ===========
The Directors' interests in Shares following the Conversion are
as follows:
% issued enlarged
issued share
Shares capital
Lord Sheppard
(including Didgemere Consultants
Limited) 16,120,321 26.08
Brian Moritz 12,280,330 19.86
Tony Carlton 1,757,857 2.84
Oliver Plummer 606,407 0.98
----------- ------------------
30,764,915 49.76
=========== ==================
The new Shares proposed to be issued pursuant to the Conversion
will rank pari passu with the existing Shares in issue and
application will be made for the new Shares to be admitted to
trading on AIM, which is expected to be on or around 31 October
2011. Following the Conversion, the total number of Shares in issue
will be 61,821,352.
Background to and reasons for the Conversion
On 10 August 2011, it was announced that the Company had ceased
production of diamonds. This was due to accidents which occurred
outside of our mining operations and the Company was informed on
that day that all contractor mining operations, including those of
the Company, had been suspended with immediate effect. This
suspension remains in effect.
The Company believes that it may be permitted to recommence
operations in the near future but that is dependent on the
satisfaction of certain new health and safety regulations. It
should be stressed that the Company's own safety record is
excellent, and that the accident which caused suspension of
production occurred elsewhere.
In order to increase production to a profitable level, the
Directors believe that further investment in plant and working
capital is required. To date, it has not proved possible to raise
further equity, and the Directors consider that a contributory
factor in this is the level of Directors' loans, as new equity
could be used to repay such loans rather than being used to step up
operations. Although each Director has confirmed that it is not his
intention to request repayment of his loan, it is also possible
that amounts may require to be repaid for legal reasons beyond the
control of the individual Director. As repayment could not
currently be made, this would involve the sale of the Company's
assets. For these reasons, it is considered advisable that the
loans should be converted to equity capital.
The price agreed for the conversion is 3.5p per Share. This
represents a premium of 86% over the closing price of 1.875p on 26
September 2011, the latest practicable date before the posting of
the letter to Shareholders. The Directors believe that the current
share price may be depressed by the suspension of operations
referred to above, and Shareholders should note that the conversion
price is also in excess of the highest closing price for the Shares
in the last three months, being 3.125p which occurred in June 2011.
Since 1 July 2011, the highest closing price has been 3.0p. The
closing price immediately prior to the announcement of suspension
of mining operations was 2.625p per Share.
The Conversion will eliminate a substantial proportion of Group
debt. Based upon the audited balance sheet as at 28 February 2011,
the Conversion as at that date would have resulted in pro forma
unaudited group net assets of GBP2.29 million compared to the
GBP1.69 million as stated.
Takeover Code and AIM Rules
Lord Sheppard, Tony Carlton and Oliver Plummer, who have other
business relationships, are considered to be acting in concert
under The Takeover Code and will collectively hold 18,484,585
Shares representing 29.9% of the Company's enlarged issued share
capital following the Conversion. Brian Moritz is considered as not
being acting in concert with either of the aforesaid under The
Takeover Code. The total holdings of all Directors following the
Conversion will be 49.76%.
As the Conversion is a Related Party Transaction under the AIM
Rules and given that all the Directors are involved in the
transaction (including Mr Plummer as a member of a concert party),
it is proposed to put Resolutions to Shareholders at the
forthcoming General Meeting on 28 October 2011 to approve the
Conversion.
No Director will vote on the Resolution to convert his own loan.
In addition, Lord Sheppard, Tony Carlton and Oliver Plummer may be
considered to be acting in concert, and will not vote on the
proposals to convert each of Lord Sheppard's and Tony Carlton's
loans, or the loan of Didgemere Consultants Limited. Subject to
those restrictions, all Directors have indicated their intention to
vote in favour of the proposals. Shareholders should note that,
whilst separate Resolutions are being put to the Meeting dealing
with each loan conversion, these Resolutions are inter-conditional
and will not take effect unless all Resolutions are passed. The
Resolutions are Ordinary Resolutions requiring in each case a
simple majority of those voting.
Enquiries:
Tony Carlton, CEO Namibian Resources Plc Telephone: 020 8726
0900
Roland Cornish, Beaumont Cornish Limited Telephone: 020 7628
3396
Note:
Copies of this announcement and the letter to shareholders
referred to herein are available on the Company's website:
www.namibianresources.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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