Pala’s Sees Its Offer as Attractive Considering Sierra Rutile’s
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Pala’s Sees Its Offer as Attractive Considering Sierra Rutile’s
LONDON, ENGLAND – 25 October 2011: Pala Investments Holdings Limited ("Pala")
notes that, in an announcement on 24 October 2011, Sierra Rutile Limited
(AIM:SRX) ("Sierra Rutile") confirmed that it was
considering both debt and equity financing options to fund part of the
US$55 million capital requirements for its expansion projects and
In light of continuing debt market volatility, Pala believes that it
will not be possible for Sierra Rutile to obtain satisfactory third
party debt financing on favourable terms to fund its capital
requirements and, as a result, Sierra Rutile will be forced to raise
funds through an equity financing.
Pala believes that, if its offer lapses, there is a strong possibility
that Sierra Rutile’s share price will fall below the offer price of 30
pence, and that any subsequent equity financing undertaken by Sierra
Rutile to fund its capital requirements is likely to be at a discount to
the market price at such time, as is customary for such financings.
Pala continues to believe that its offer, as well as the unconditional
opportunity to sell via its broker and the private treaty option,
provide a unique liquidity opportunity for Sierra Rutile shareholders
prior to a likely equity financing. Sierra Rutile shareholders wishing
to take advantage of this exit opportunity should take note of these
options and the upcoming deadlines noted below.
Update on acceptances
As of 24 October 2011, Pala holds, or has agreed to acquire by private
treaty or market purchases, 215,334,877 Sierra Rutile Shares,
representing 43.11 per cent. of Sierra Rutile’s issued share capital. In
addition, valid acceptances of Pala’s offer have been received in
respect of 1,670,893 Sierra Rutile shares, representing 0.33 per cent.
of Sierra Rutile’s issued share capital.
In aggregate, therefore, Pala has acquired, agreed to acquire or
received valid acceptances in respect of 217,005,770 shares,
representing 43.44 per cent. of Sierra Rutile’s issued share capital.
For Pala’s offer to become unconditional by 1 p.m. (London time) on 4
November 2011, this aggregate must exceed 50%. If the offer were to
lapse on 4 November 2011, Pala will not be able to acquire the shares,
currently representing 0.33 per cent. of Sierra Rutile’s issued share
capital, from those Sierra Rutile shareholders who have accepted the
Deadlines for Private Treaty and Improved Offer
Any Sierra Rutile shareholder who wishes to sell its shares to Pala
regardless of the outcome of the offer should contact its own investment
advisor or Pala’s corporate broker, Northland Capital Partners Limited
(contact details noted below), as announced by Pala on 11 October 2011.
Sales through Northland Capital Partners can be effected immediately,
and are not conditional on the outcome of Pala’s offer and must occur by
4 November 2011. Pala would note again its statement of 11 October 2011,
in which it indicated that the offer price of 30 pence was final and
would not be raised again.
Further, applications from Sierra Rutile shareholders wishing to sell
their shares directly to Pala by private treaty must be received by no
later than 1.00 p.m. (London time) on 1 November 2011. Sierra Rutile
shareholders who have already accepted Pala’s offer can elect the
private treaty option and ensure they receive the benefits of the price
of 30 pence per Sierra Rutile share even if Pala’s offer lapses.
Pala’s offer will close at 1.00 pm (London time) on 4 November 2011 and
will not be extended unless the Acceptance Condition is satisfied by
such date, in which case the offer will remain open for acceptance for
at least a further 14 days as required under Rule 31.4 of the Code.
Contact details of Northland Capital Partners
Northland Capital Partners Limited
Telephone: +44 (0)20 7796 8863
This announcement should be read in conjunction with the full text of
the announcements of 7 September 2011 and 3 October 2011 (including
their respective Appendices) and 11 October 2011. The Acceptance
Condition and the terms of the Improved Offer are set out in Appendix I
to Pala Mineral Limited’s earlier offer announcement made on 7 September
2011 (the "Original Offer Announcement") (as modified by paragraph 4 of
the announcement of the 3 October 2011 (the "Improved Offer
Announcement")). Unless the context otherwise requires, definitions used
in the Original Offer Announcement and Improved Offer Announcement also
apply to this announcement.
Pala Investments AG
Pala Investments Holdings Limited is a multi-strategy investment company
dedicated to investing in, and creating value across, the mining sector
in both developed and emerging markets. Pala's exclusive investment
advisor, Pala Investments AG, has extensive experience within the mining
sector. Pala seeks to assist companies in which it has long-term
shareholdings by providing strategic advice and innovative financing
solutions. For more information, visit www.pala.com.
Application of the City Code on Takeovers and Mergers (the "Code")
By virtue of its status as a company incorporated in the British Virgin
Islands, the Code does not apply to Sierra Rutile. Shareholders are
reminded that whilst Sierra Rutile's articles of association require
offers to be made on terms that would be required by the Code, save to
the extent that the Board of Sierra Rutile otherwise determines, the
Panel on Takeovers and Mergers does not have responsibility for ensuring
compliance with the Code in respect of the Improved Offer and is not
able to answer shareholders' queries in relation to Sierra Rutile, Pala
or the Improved Offer.
In particular, the Board of Sierra Rutile has confirmed to Pala that it
does not intend to require Opening Position Disclosures and Dealing
Disclosures (as referred to in the Code) to be made by shareholders
(other than PML and persons acting in concert with PML) in accordance
with Rule 8 of the Code. Shareholders are reminded that public
disclosures consistent with the provisions of Rule 8.3 of the Code
should not be e-mailed to the Panel on Takeovers and Mergers.
The Improved Offer will not be made, directly or indirectly, in or into,
or by the use of the mails or any means of instrumentality (including,
without limitation, telephonically or electronically) of interstate or
foreign commerce of, or any facilities of a national securities exchange
of the United States, Canada, Australia or Japan. Accordingly, except as
required by applicable law, copies of this announcement are not being,
and may not be, mailed or otherwise forwarded, distributed or sent in,
into or from the United States, Canada, Australia or Japan. Persons
receiving this announcement (including, without limitation, nominees,
trustees or custodians) must not forward, distribute or send it into the
United States, Canada, Australia or Japan.
The availability of the Improved Offer to Sierra Rutile Shareholders who
are not resident in the United Kingdom may be affected by the laws of
the relevant jurisdictions. In particular, as described in Appendix I of
the Original Offer Announcement, the Improved Offer will not be made
directly or indirectly into the United States, Canada, Australia or
Japan. Sierra Rutile Shareholders who are not resident in the United
Kingdom should inform themselves about and observe any applicable
requirements and read paragraph 6 of Part B, paragraph (c) of Part C and
paragraph (c) of Part D of Appendix I of the Original Offer Announcement
before taking any action.
Publication of this announcement
A copy of this announcement will be available at www.pala.com
by no later than 12.00 p.m. (London time) on the business day after the
date of this announcement. You can obtain a hard copy of this
announcement or any information incorporated by reference by contacting
Computershare Investor Services PLC, Corporate Actions Projects,
Bristol, BS99 6AH. You will not receive a hard copy of this announcement
or any information incorporated by reference unless you so request. You
may also inform Computershare that you wish all future documents,
announcements and information in relation to the Improved Offer be sent
to you in hard copy.