TIDMCAS
RNS Number : 8974Q
Crusader Resources
22 February 2019
Agreement reached on funding proposal and proposed Board
changes
Crusader Resources Limited (ASX: CAS, AIM: CAS) ("Company" or
"Crusader") is pleased to announce the following updates in
relation to the Company's funding position and proposed Board
changes.
Rights Issue
As previously announced, the Company is intending to undertake a
non-renounceable pro rata entitlement offer to eligible
shareholders (Rights Issue). The Company has now finalised the
terms of the proposed Rights Issue, pursuant to which it seeks to
raise approximately $4.2 million (before costs). The funds raised
will be used for the completion of the Borborema Gold Project
Bankable Feasibility Study; continued development and maintenance
of the Borborema and Juruena Gold Projects in Brazil; costs of the
Rights Issue and general working capital purposes.
The Company intends on offering eligible shareholders the
opportunity to subscribe for four new shares for every five shares
held on the record date for the Rights Issue, at an issue price of
$0.01 per share. Eligible shareholders will also be entitled to
subscribe for shortfall shares in addition to their
entitlement.
Subscribers in the Rights Issue will also be issued one
free-attaching option for every three new shares subscribed for,
exercisable at $0.02 each and expiring three years from the date of
issue.
Partial Underwriting
The Company is pleased to announce that it has successfully
concluded its discussions with its major shareholder, the Copulos
Group, and executed a binding conditional underwriting agreement
for a partial underwriting of the Rights Issue (Underwriting
Agreement). The Copulos Group has agreed to underwrite $2.5 million
of the Rights Issue pursuant to the terms of the Underwriting
Agreement.
The Company has been exploring a range of capital-raising
alternatives over a number of months and considers that the terms
proposed by the Copulos Group under the Underwriting Agreement are
superior to those offered by any other parties at this time. This
conclusion has been reached in light of the terms of the
Underwriting Agreement and the timing and quantum of the Company's
funding requirements.
The Company is grateful for the ongoing support of the Copulos
Group. The partial underwriting is in addition to the $1.5 million
of interim funding the Copulos Group has provided to the Company
over recent months by its subscription of convertible notes.
The material terms and conditions of the Underwriting Agreement
are summarised in the schedule to this announcement. Importantly,
the Company notes that the Underwriting Agreement is a related
party transaction under the ASX and AIM rules and the Corporations
Act, and is subject to shareholder approval. Further terms and
conditions of the underwriting will be provided in the notice of
meeting, which will include an independent expert's report.
Further details regarding the Rights Issue, including the
timetable, will be announced in due course. It is intended to issue
a Prospectus for the Rights Issue and a notice of meeting seeking
the approvals required under the Underwriting Agreement as soon as
possible following the receipt of the necessary independent
expert's report.
Proposed Board Changes
With the terms of the Underwriting Agreement now being agreed
between the Board and the Copulos Group, the Company's Chairman,
Andrew Vickerman, and Managing Director, Marcus Engelbrecht, have
agreed with the Copulos Group to step down from the Board with
effect from the end of 28 February 2019. The resignations are
subject to and conditional on Resolution 3, the approval of the
cancellation of Crusader's shares from trading on AIM, being
approved at the general meeting to be held on 28 February 2019.
It is intended that with effect from the resignation of Mr
Vickerman and Mr Engelbrecht, Mr Stephen Copulos and Mr Andrew
Richards will be appointed as Directors. Mr Copulos will be
appointed as the Non-Executive Chairman of the Company. Mr Richards
will be appointed as an Executive Director.
Biographies of Mr Copulos and Mr Richards are below.
Mr Stephen Copulos
Mr Copulos has over 35 years of experience in a variety of
businesses and investments in a wide range of industries, including
manufacturing, mining, fast food, property development and
hospitality. He has been the Managing Director of the Copulos Group
of companies, a private investment group, since 1997. Mr. Copulos
is an active global investor who brings significant business acumen
and greater diversity to the Board of Crusader. He has been a major
shareholder of Crusader for many years and is aligned to improving
shareholder returns. Mr Copulos has over 20 years' experience as a
company director of both listed and unlisted public companies. He
is currently the non-executive Chairman of Consolidated Zinc
Limited and Restaurant Brands Limited in New Zealand and was a
non-executive director of Black Rock Mining Limited until October
2017 and Collins Foods until October 2014.
Mr Copulos was on the Board of Crusader from March 2013 until
April 2018, when he stepped down from the position following the
Company's admission to AIM.
Mr Andrew Richards
Mr Richards is a geologist with over 30 years of experience in
the international mining industry which included company management
and project finance. He has worked at a senior level in both
production and exploration over a wide variety of areas and
commodities and also undertaken technical reviews, project audits
and monitored project construction. He is a member of the AusIMM,
AIG, SEG and the AICD. Mr Richards has worked extensively with
gold, base metals, rare earths and industrial minerals in
Australasia, Asia, Africa and South America. He is and has been on
the boards of several listed companies on ASX and AIM and was
previously Managing Director and CEO of two ASX listed companies
operating in China.
Further details regarding Mr Copulos and Mr Richards will be
provided in accordance with Schedule Two (g) of the AIM Rules on
their appointment to the Board on 1 March 2019.
Requisitioned Shareholder Meeting
The Company refers to the general meeting scheduled for 22 March
2019, as requisitioned by Mr William Richard Brown, Vitor Pty Ltd,
Chinetti Investments Pty Ltd and Parkwise Corporation Pty Ltd
(together, Requisitioning Shareholders) pursuant to section 249D of
the Corporations Act (Requisitioned Shareholder Meeting).
At the Requisitioned Shareholder Meeting, the Requisitioning
Shareholders are seeking approval for the appointment of Mr Brett
Clark, Mr David Sanders and Mr Carl Luttig (together, Nominee
Directors) as Directors of the Company and the removal of Mr Marcus
Engelbrecht and Mr Andrew Vickerman as Directors of the
Company.
As noted above, Mr Engelbrecht and Mr Vickerman are proposing to
step down as Directors with effect from 28 February 2019.
Accordingly, it is intended that Resolutions 4 and 5 will be
withdrawn prior to the Requisitioned Shareholder Meeting, when
these resignations take effect. A further update will be provided
in due course.
The Company notes that the conditions to the Underwriting
Agreement will not be satisfied if the Nominee Directors are
appointed.
Neither the Requisitioning Shareholders, nor the Nominee
Directors, have advised the Company of any proposal to provide
sufficient funding to the Company to enable it to continue as a
going concern, and ultimately be reinstated to quotation on ASX.
Accordingly, the Board considers that approving the resolutions at
the Requisitioned Shareholder Meeting seriously risks the Company's
solvency. The current Board considers that the partially
underwritten Rights Issue is the most realistic strategy for
raising the funds required to put the Company in a position where
it can adequately address ASX's queries with a view to being
reinstated to trading. The Board also does not intend on raising
any funds over and above what it considers to be reasonably
necessary to maintain is solvency and ultimately be reinstated to
quotation on ASX.
Accordingly, the Board reiterates its recommendation that
shareholders vote AGAINST the resolutions that the Requisitioned
Shareholder Meeting.
AIM related party
Stephen Copulos is a related party of the Company under the AIM
Rules as he is both a former director within the last 12 months and
a substantial shareholder, and the Underwriting Agreement is a
related party transaction under the AIM Rules. The Directors of the
Company consider that the terms of the Underwriting Agreement are
fair and reasonable insofar as the Company's shareholders are
concerned. In forming this view, the Directors have taken into
account the current financial position of the Company and that the
partially underwritten Rights Issue is the most realistic strategy
for raising the funds required to put the Company in a position
where it can adequately address ASX's queries with a view to being
reinstated to trading. Furthermore, the proposed Rights Issue is
subject to the approval of independent shareholders and the issue
of a fair and reasonable third-party report in accordance with the
rules of ASIC and ASX.
Schedule - Material terms of Underwriting Agreement
Rights Issue Pro rata non-renounceable pro-rata offer to all eligible
shareholders on the basis of 4 new shares for every
5 shares held at the record date.
The subscription price for the new shares will be $0.01
each.
Subscribers for new shares will be issued one free-attaching
option, exercisable at $0.02 each and expiring 3 years
after the date of issue (Options), for every three new
shares subscribed for.
Underwriter Eyeon Investments Pty Ltd (Underwriter)
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Underwritten amount $2.5 million
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Conditions
* (AIM delisting) the cancellation of the admission of
the shares from trading on AIM having taken effect;
* (ASX Re-Listing) the Company engaging with the ASX
and having obtained in writing the requirements to
have its shares reinstated to quotation on ASX;
* (Shareholder approvals) the members of the Company in
general meeting providing the shareholder approvals
required for the Underwriting Agreement by the
necessary majorities;
* (Prospectus) the Company lodging the Prospectus with
the ASIC and the Rights Issue not being withdrawn by
the Company;
* (Costs) the Company reimbursing the Underwriter for
its legal costs incurred in preparation of the
Underwriting Agreement, and related documents as
agreed between the Parties, up to a maximum of
$50,000;
* (Director changes): the Board comprising John Evans,
Andrew Richards and Stephen Copulos; and
* (Event of Insolvency) no event of insolvency has
occurred in respect of the Company,
(together, Conditions).
The Conditions are to be satisfied or waived by no later
than four months after the date of the Underwriting
Agreement, or such other date as agreed by the parties
in writing (Cut-Off Date).
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Underwriting fees
* A cash payment equal to 6% of the underwritten amount
(that is, $150,000); and
* 30 million Options (for which shareholder approval
will be sought, in accordance with item 7 of section
611 of the Corporations Act).
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Termination events Either Party may terminate the Underwriting Agreement
if:
* the Conditions are not satisfied or waived by the Cut
Off Date; or
* the Conditions become incapable of satisfaction or
the parties agree that any of the Conditions cannot
be satisfied.
In addition, the Company may terminate the Underwriting
Agreement following receipt of a competing proposal
which:
* is bona fide and is made by or on behalf of a person
that the Board reasonably consider is of sufficient
commercial standing to implement the competing
proposal; and
* the Board, acting in good faith and after having
obtained advice from its external legal and financial
advisers, has determined;
o is a superior proposal; or
o completing the Underwriting Agreement would be likely
to constitute a breach of the fiduciary duties or statutory
obligations of any member of the Board.
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Director appointment On and from the date of completion of the Underwriting
right Agreement, the Underwriter will be entitled to appoint
a representative to the Board (Nominated Director).
The initial Nominated Director will be Stephen Copulos.
The right to appoint the Nominated Director will cease
to apply if the relevant interest of the Underwriter
and its associates in the Company's shares falls below
10% on an undiluted basis for more than thirty (30)
consecutive days on which the ASX is open for trading.
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Additional provisions Additional provisions customary for agreements of this
nature, including representations and warranties, indemnities,
completion mechanics and general provisions have been
included.
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For further information, please contact:
Investor Relations Camarco
Office (Aus): +61 8 9320 7500 Financial PR
Email: admin@crusaderresources.com Gordon Poole / Nick Hennis
/ Thayson Pinedo
+44(0)20 3757 4997 / +44(0)20
3781 8330
Andrew Beigel Pinnacle Corporate Finance
Company Secretary Office: +61 8 6141 6306
Office (Aus): +61 8 9320 7500 Email: ejonsson@pinnaclecf.com.au
Email: andrew.beigel@crusaderresources.com Ref: Crusader Resources Limited
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END
MSCLLLFLKLFZBBZ
(END) Dow Jones Newswires
February 22, 2019 07:45 ET (12:45 GMT)
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