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"In addition, under the BHP Subscription Agreement, BHP is also contractually entitled to restrict the number of Ordinary Shares the Company may issue in a rolling 12 month period. Accordingly, if such restrictions are enforced by the relevant counterparty ahead of the closing of the Acquisition, the Company may be restricted in its current and future ability to issue Ordinary Shares and raise funding, including in relation to the Acquisition. Any such actions by Shareholders will have a material adverse impact on the Group’s business, results of operations, financial condition or prospects."
My understanding is that BHP could have blocked this through imposing limits on the number of Ordinary Shares we issue?
In this paragraph of the RNS
"On Admission, the total issued share capital of the Company will comprise 3,002,005,861 ordinary shares of 1p each with voting rights. SolGold does not currently hold any shares in treasury and, therefore, the above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company."
Do any of the wiser heads have a view on my 15.17 post? DinnerMoney?
SM, yes, we are exposed until the 27th. If BHP want to play really dirty, now's the time.
Of course, if they did we'll carry on as before, but CGP don't have any cash and will be up the creek sans paddle.
I'm guessing we cleared this with BHP before the event, but such is the poor state of our relationship with them, we can't be sure.
Thanks addicknt. I wonder if Bob Sangha knew this was a risk before he did that interview with the AFR. Reckless IMO.
SM, the thought crossed my mind.
I thought the AGM resolutions recently passed (Dec 22) now circumnavigated any such issues. So yes... from prospectus point of view, it's correct but then post AGM we gained right to issue bucket loads of shares so bypassed the old BHP clause. It still exists but we have other means available to issue stock post AGM from what I understand.
Fort, I think we needed 75% for the Specials, which we didn't get.
The following are in the Prospectus Colonel and therefore surely still apply...
Newcrest
"Anti-Dilution Right
Subject to the passage of any necessary authorised issue resolution and/or disapplication
resolution (which the Company must use its reasonable endeavours to secure), if the Company
wishes to allot and issue any equity securities either for cash (a “Newcrest Further Raising”) or
pursuant to a transaction for non-cash consideration (a “Newcrest Other Transaction”), and at
that time Newcrest International holds at least 5 per cent. of the Ordinary Shares in the
Company, then the Company must give Newcrest International the opportunity to subscribe for:
* in the case of a Newcrest Further Raising, such number of Ordinary Shares in the
Newcrest Further Raising; and
* in the case of a Newcrest Other Transaction, such number of Ordinary Shares
(a “Newcrest New Issue”),
that following the allotment and issue of all Ordinary Shares pursuant to the Newcrest Further
Raising or the Newcrest Other Transaction (as the case may be, together the “Relevant
Transaction”), Newcrest International holds the same percentage of Ordinary Shares on issue as
it held immediately prior to the Newcrest Further Raising or the Newcrest Other Transaction
(as the case may be) (the “Newcrest Anti-Dilution Right”). If at the time of a Relevant
Transaction, Newcrest International holds more than 10 per cent. of the Ordinary Shares, then
the Company shall give Newcrest International the opportunity to subscribe for so many
Ordinary Shares that following the allotment and issue of all Ordinary Shares issued pursuant to
the Relevant Transaction, Newcrest International holds 10 per cent. of the Ordinary Shares then
issued and outstanding."
I'm not sure BHP could have blocked the acquisition (if they did they've had almost 5 months to do so...)
Here is their Antidilution
"Subject to the passage of any necessary authorised issue resolution and/or disapplication
resolution (which the Company must use its reasonable endeavours to secure), if the Company
wishes to allot and issue any equity securities either for cash (a “Further Raising”) or pursuant
to a transaction for non-cash consideration (an “Other Transaction”), and at that time BHP
Billiton holds at least 10 per cent. of the Ordinary Shares in the Company, then the Company
must give BHP Billiton the opportunity to subscribe for:
* in the case of a Further Raising, such number of Ordinary Shares in the Further Raising;
and
* in the case of an Other Transaction, such number of Ordinary Shares (a “New Issue”),
that following the allotment and issue of all Ordinary Shares pursuant to the Further Raising or
the Other Transaction (as the case may be), BHP Billiton holds the same percentage of Ordinary
Shares on issue as it held immediately prior to the Further Raising or the Other Transaction
(as the case may be) (the “Anti-Dilution Right”). If at the time of a Further Raising or the
Other Transaction, BHP Billiton holds more than 10 per cent. of the Ordinary Shares, then the
Company shall give BHP Billiton the opportunity to subscribe for so many Ordinary Shares that
following the allotment and issue of all Ordinary Shares issued pursuant to the Further Raising
or the New Issue, BHP Billiton holds 10 per cent. of the Ordinary Shares then issued and
outstanding."
So will we see new shares issued to BHP and Newcrest after Monday...?
Red,
Based on my calls, when the new shares get issued BHP and NCM are virtually bang on 10% levels. So no major issue there. Of course if they are a minor 0.3% off that level then I guess they can top up but highly doubt they'd bother. It's minor.
Colonel I read the Prospectus as meaning "if you're going to issue any new shares and we hold at least 10% we're entitled to new shares" but its unclear to me...
Does "and at that time BHP Billiton holds at least 10 per cent" mean at the time of the proposed issue or at the time of the first dealings.
If the former than they would appear to have foregone their right...
Thinking about this it's difficult to see why BHP would block it.
The consolidation of the asset has made their life easier should they wish to buy the company. They won't be worried about the minor dilution.
Agree, BHP would never block the consolidation of the ENSA into 100% SOLG owned ENSA. Like shooting themselves in the foot! They own 12.5% (currently) of SOLG shares... not CGP shares. Hence, they like all of us are gaining the 15% ENSA stake for our 500m+ share issue. I don't think the 6% equity placing to the Chinese was all about gaining a modest $36m! I think message was clear. The last thing BHP would want to do is get into a bidding competition with the chinese over the 15% ENSA stake which was the likely outcome should anything get blocked. Remember... nothing to stop CGP selling that stake to whoever they liked (assuming SOLG in agreement etc).
Bob smashed up NCM and BHP pretty well with the recent deals. But BHP (if still interested) will not be too fussed especially if it's ENSA they are after as it's days away from being reduced from two complicated messy bites to one nice large bite.
Another interesting week ahead? How many times have I heard that?