China Africa Resources PLC on Monday said it was proposing a board restructuring, a GBP1.0 million fundraise and a transition into a cash shell.
The natural resource exploration and development company said the proposals will be put to shareholders at a general meeting on December 14.
China Africa said if shareholders approve the proposals, its current sole interest, in the Berg Aukas Project, will be distributed to shareholders via a special dividend valued at 1.75 pence per share.
This is because the group has been informed by new investors that they have “no interest in pursuing” the project as an asset, the company said. The interest is currently held through China Africa’s subsidiary China Africa Resources Namibia (Pty) Ltd.
On completion of this special dividend, China Africa will be regarded as a cash shell, and must make an acquisition or enter into a deal which constitutes as a reverse takeover within six months of the transfer or its shares will be cancelled from AIM, it said.
The group is seeking to undertake a reverse takeover and will “not be limited to a specific geographic focus”, but will be focused on the energy metals and minerals sector.
In light of this, China Africa said it has secured commitments in a placing and subscription of 46.1 million shares at a price of 2.17 pence per share to raise GBP1.0 million which it said should support the pursuit of a suitable reverse takeover. Each new share will have a warrant to acquire an additional share at a price of 4.34p per share.
China Africa is also seeking a restructuring of the board, to comprise of Non-Executive Chairman Rod Webster, Chief Executive Paul Johnson and two Non-Executive Directors John Bryant and Nick O’Reilly. Johnson is the CEO of Metal Tiger PLC, the UK-listed natural resources investor, Currently, Cungen Ding serves as non-executive chairman, and will step down as part of the proposals.
Webster is shifting from his current role as chief executive, and Johnson and O’Reilly are new additions to the company.
The restructuring will also see Non-Executive directors Li Ming and Wuming Wang step down, and Non-Executive Independent Director James Richards and Frank Lewis leave.
Johnson has proposed to personally invest GBP50,000 in the proposed fundraise and, alongside this, the proposed new board has said it will accept 50% of the proposed remuneration in shares at 2.17p per share.
“Existing shareholders of the company will, if the proposals are approved, benefit from the special dividend of the shares in CAR Namibia, whilst also having access to potential further upside that may be secured through any reverse takeover subsequently completed by the company,” said Ding.
Shares in China Africa Resources were untraded on Monday, having last traded at 4.03p.
Source: Alliance News, November 21