Notice of EGM

RNS Number : 3869Z

Obtala Resources Limited

06 March 2013

 



6 March 2013

Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Notice of General Meeting

Obtala Resources Limited (AIM:OBT), the natural resource investment and development company, announces that today, it will be posting a circular to all shareholders enclosing a notice for a General Meeting to be held at the Company's registered office on 3 April 2013 at 11.00 am to transact the following business:

The Company is seeking shareholder approval to enter into an off-market transaction to enact the buyback of 11,949,378 the Company's ordinary shares ("Ordinary Shares")

The Board proposes that the Company buy back 11,949,378 Ordinary Shares held by Mineral Wealth International ("MWI") for a consideration to be settled in full by the transfer of part of its existing shareholding in Bushveld Minerals Limited ("Bushveld Minerals") amounting to a total of 30,120,482 ordinary shares in Bushveld Minerals. Following the settlement transfer, Obtala will retain 100,404,178 shares in Bushveld Minerals representing a holding of 35.4% of the issued share capital of Bushveld Minerals.

To provide the Board with flexibility over re-issuing the 11,949,378 Shares, the Company is also seeking shareholder approval to allow for the disapplication of pre-emption rights to enable it to allot equity securities, for cash, with an aggregate nominal amount of £662,626.24. This includes the potential exercise of all outstanding warrants as previously announced.

Background to and reasons for the Proposals

On 23 February 2011 and on 7 March 2011, the Company announced it had agreed to acquire a 50% interest in each of Greenhills Resources Ltd ("Greenhills") and Bushveld Resources Ltd ("Bushveld") respectively. These investments gave the Company an interest in the Mokopane Tin and Iron Ore projects in South Africa. The agreements were subject to certain conditions including the re-issuance of certain licences and were completed shortly prior to the entire issued share capital of a new holding company for both Bushveld and Greenhills, Bushveld Minerals, was admitted to trading on the AIM market of the London Stock Exchange on 26 March 2012. Under the terms of the acquisition and shortly prior to the listing of Bushveld Minerals, 11,949,378 new ordinary shares in the Company were issued to MWI, the vendors of Bushveld, as part of the acquisition consideration and these shares are subject to a lock in which expires on 14 March 2013.

As part of the transaction leading up to the listing of Bushveld Minerals, Obtala obtained a holding of 130,524,660 shares in Bushveld Minerals. These shares are also subject to a lock-in period which expires on 26 March 2013.

The Company is now proposing to buy back the 11,949,378 of its shares held by MWI, which represents the entire holding that MWI obtained as part of the acquisition of 50% of Bushveld by Obtala. Obtala has agreed with MWI that the buy back will be settled by transfer of part of its existing shareholding in Bushveld Minerals amounting to a total of 30,120,482 shares in Bushveld Minerals.

The agreed value of Obtala shares under the buy back proposal is 33.0 pence per share and the agreed value of Bushveld Minerals shares to be exchanged in settlement is 13.09 pence per share, both equivalent to an exchange value of £3,943,294.74 in total.

The proposed off-market share buyback and share exchange is aimed at enhancing shareholder value and limiting the market impact once the mandatory lock-in period expires. Under the AIM rules and the current authority obtained at the last Annual General Meeting, the company is only permitted to buy back Ordinary Shares on-market. As this proposed buyback is to be effected off-market, shareholder approval is required.

Obtala Resources Francesco Scolaro - Chairman Simon Rollason - Managing Director www.obtalaresources.com	[phone]
Macquarie Capital (Europe) Limited (Nomad and Broker)
Nicholas Harland	[phone]
Steve Baldwin

 

END

 

 

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