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CAS Crusader Resou.

1.375
0.00 (0.00%)
Last Updated: 01:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Crusader Resou. LSE:CAS London Ordinary Share AU000000CAS1 ORD NPV (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1.375 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Crusader Resources Agreement on funding proposal and Board changes (8974Q)

22/02/2019 12:45pm

UK Regulatory


Crusader Resou. (LSE:CAS)
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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) 
                         ------------------------------------------------------------------ 
 Underwritten amount      $2.5 million 
                         ------------------------------------------------------------------ 
 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). 
                         ------------------------------------------------------------------ 
 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). 
                         ------------------------------------------------------------------ 
 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. 
                         ------------------------------------------------------------------ 
 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. 
                         ------------------------------------------------------------------ 
 Additional provisions    Additional provisions customary for agreements of this 
                           nature, including representations and warranties, indemnities, 
                           completion mechanics and general provisions have been 
                           included. 
                         ------------------------------------------------------------------ 
 

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 
 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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(END) Dow Jones Newswires

February 22, 2019 07:45 ET (12:45 GMT)

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