TIDMPRS
RNS Number : 9441O
Paternoster Resources PLC
23 May 2018
23 May 2018
Paternoster Resources plc
("Paternoster" or the "Company")
Increase in share allotment authorities
Investment advisory agreement
Notice of General Meeting
The Company is pleased to announce that it has posted a circular
and notice of a General Meeting (the "Document"), to be held at the
offices of Keystone Law, 48 Chancery Lane, London, WC2A 1JF at
11.00 am (BST) on 8 June 2018. The Document will shortly be posted
on the Company's website www.paternosterresources.com
Introduction
On 18 January 2018, the Board of Paternoster Resources plc
announced that it had entered into an arrangement with RiverFort
Global Capital Ltd, the specialist provider of capital to junior
companies ("RiverFort"), whereby Paternoster would have the
opportunity to invest in transactions arranged by RiverFort
alongside other co-investors.
On 20 April 2018, the Board announced that, as a first step in
the development of this arrangement, it had agreed to invest around
GBP250,000 in a portfolio of income-yielding investments arranged
by RiverFort which comprise investments in the form of both senior
and convertible debt. This portfolio represented, on average,
around 2.8% of the total investment amounts originally arranged by
RiverFort and therefore demonstrates the scope for Paternoster to
scale-up the size of its investments as it develops its
relationship with RiverFort. This should enable the Company to
quickly grow its portfolio with investments that can generate both
attractive cash returns whilst providing downside protection.
Increase in share allotment authorities
Given, the investment opportunities that the Board believe are
available and the increase in the level of investor interest, both
as a result of the arrangement with RiverFort, the Company is now
seeking the necessary authorities from shareholders to be in a
position to raise additional investment funds from investors to
deploy in these investment situations should opportunities arise.
In the event that the Company decides to raise new funds, these are
likely to be raised at or around the prevailing market share price
which is currently slightly above nominal value of the Company's
ordinary shares. Based on the latest quarterly update published by
the Company, this would represent a 41 percent. discount to the
Company's underlying net asset value per share. In the event that
such funds are raised, an appropriate opportunity such as the
provision of an open offer, would also be made available to
existing shareholders to enable them to subscribe for new shares in
the Company on similar terms.
Investment advisory agreement
As a further development of the Company's evolving strategy,
Paternoster is proposing to enter into an investment advisory
agreement ("Investment Agreement") with RiverFort. The Investment
Agreement will secure Paternoster's access to RiverFort's
investment pipeline and enable it to utilise RiverFort's investment
infrastructure. This infrastructure will provide services such as
investment structuring, due diligence and sector expertise. This
arrangement will also enable costs to be reduced within the listed
company. As a result of this arrangement, Paternoster will be the
only company listed on AIM or the London Stock Exchange that will
have exclusive access to this range of RiverFort services and its
investment pipeline. Investors wishing to obtain exposure to
RiverFort's investment opportunities via a company listed on AIM or
the London Stock Exchange will only be able to do so by investing
in Paternoster.
The Investment Agreement will be for an initial period of two
years after such time either party can terminate the agreement by
giving one year's notice. RiverFort will receive an annual retainer
fee equivalent to two per cent. of the Company's net assets and a
performance fee equivalent to 20 per cent. of the profits generated
on each new investment. The performance fee shall only be payable
on the cash profits received by Paternoster from these investments.
Paternoster shall also receive 60 per cent. of its pro rata share
of any deal related fees generated from such investments. Going
forward, it is the intention that at least 75 per cent. of
investment funds available for investment will be invested in
RiverFort arranged opportunities and no more than ten per cent.
will be invested in pure equity investments. The ultimate
investment decision with regard to any investment opportunity will,
however, still remain with the Board of Paternoster.
Whilst, the entering into of the Investment Agreement is simply
an additional means by which the Board intends to pursue the
development of Paternoster's existing investing policy, the Board
believes that it is appropriate that shareholders be asked to
approve this arrangement.
RiverFort is a highly-respected provider of specialist financing
to the natural resources sector, providing equity, convertible debt
and senior project finance solutions. RiverFort is the investment
director of Cuart Investments PCC Limited, a Gibraltar Experienced
Investor Fund. Since its formation, RiverFort has been able to
arrange very attractive returns for its investors. In 2016, its
first year of operation, Cuart Investments PCC Limited - Cuart
Growth Capital Fund I achieved an increase in its audited NAV of
over 15% between July and December 2016. , The increase in NAV for
2017, on an unaudited basis, is expected to be over 20%. From the
date of its formation to 31 March 2018, RiverFort, on behalf of
Cuart Growth Capital Fund I, its co-investors and other investment
partners, has arranged over US$76 million of investments. The
RiverFort team has an international footprint and a range of
financial, entrepreneurial and industrial expertise. Riverfort is
authorised and regulated by the Financial Conduct Authority.
Resolutions
To increase the authorities to issue new ordinary shares in the
Company should the opportunity arise and to enter into an
investment advisory agreement with RiverFort as set out in the
notice of General Meeting included at the end of this document.
Resolution 1: Investment advisory agreement
This resolution authorises the directors to enter into an
investment advisory agreement with RiverFort.
Resolution 2: Authority to allot shares
This resolution grants the directors authority to allot shares
in the capital of the Company and rights to subscribe for shares up
to an aggregate nominal value of GBP6,000,000, representing
approximately 335% of the nominal value of the issued ordinary
share capital of the Company as at 21 May 2018, being the latest
practicable date before publication of this notice. Unless revoked,
varied or extended, this authority will expire at the conclusion of
the next AGM of the Company or 15 months from the passing of the
resolution, whichever is the earlier.
Resolution 3: Resolution to disapply pre-emption rights
This resolution authorises the directors in certain
circumstances to allot equity securities for cash other than in
accordance with the statutory pre-emption rights (which require a
company to offer all allotments for cash first to existing
shareholders in proportion to their holdings). The relevant
circumstances are either where the allotment takes place in
connection with a rights issue or the allotment is limited to a
maximum nominal amount of GBP6,000,000, representing approximately
335% of the nominal value of the issued ordinary share capital of
the Company as at the date of this letter. Unless revoked, varied
or extended, this authority will expire at the conclusion of the
next AGM of the Company or 15 months from the passing of the
resolution, whichever is the earlier.
General Meeting
A notice of General Meeting of Paternoster Resources plc to be
held at the offices of Keystone Law at 48 Chancery Lane, London
WC2A 1JF on 8 June 2018 at 11:00 am is set out at the end of the
Document. At the General Meeting, the Resolutions will be
proposed.
Recommendation
Given Mr Andrew Nesbitt's role as a consultant to RiverFort, the
Board considers him non-independent for the purposes of the
resolution with regard to the Investment Agreement and therefore he
has excused himself from that aspect of the recommendation
below.
The Directors (other than as described above) believe that all
of the Resolutions will promote the success of the Company for the
benefit of its shareholders as a whole, and unanimously recommend
that Shareholders vote in favour of the Resolutions to be proposed
at the General Meeting, as they intend to do in respect of their
shareholdings, representing in aggregate, 0.9 percent. of the
Company's issued share capital.
For more information, please contact:
Paternoster Resources plc: +44 (0) 20 7580 7576
Nicholas Lee, Chairman
Nominated Adviser: +44 (0) 20 7628 3396
Beaumont Cornish
Roland Cornish/Rosalind Hill Abrahams/Felicity Geidt
Joint Broker: +44 (0) 20 7186 0050
Shard Capital Partners LLP
Damon Heath
Erik Woolgar
Joint Broker:
Peterhouse Capital Limited +44 (0) 20 7562 3351
Lucy Williams
APPIX ONE
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of the Document 22 May 2018
Latest time and date for receipt of Forms of Proxy in respect of the General Meeting 11.00 am on 6 June 2018
General Meeting 11.00 am on 8 June 2018
All times in this announcement refer to London time (BST).
APPIX TWO
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"AIM" the market of that name operated by the London Stock Exchange
"Company" Paternoster Resources plc
"Directors" or "the Board" the directors of the Company at the date of this announcement
"Document" the document dated 22 May 2018
"General Meeting" or "GM" the general meeting of the Company (or any adjournment of such meeting) convened for
11.00
am on 8 June 2018 to be held at the offices of Keystone Law at 48 Chancery Lane,
London WC2A
1JF for which the notice is set out at the end of the Document
"Form of Proxy" the form of proxy enclosed with the Document for use by Shareholders in connection
with the
General Meeting
"Ordinary Shares" or "Shares" ordinary shares of GBP0.001 each in the capital of the Company
"Resolutions" the resolutions set out in the Notice of General Meeting at the end of the Document
"Shareholders" holders of Ordinary Shares
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END
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