Perth-headquartered Alara Resources will seek Takeovers Panel approval to issue shares under a $15 million raise, due to concerns over a major holder’s growing presence on its registry.
Alara shareholders Kent Bedford, Steven Dahlin, Sean Reeves and Jason Prichard sounded the alarm last week over the five-for-eight renounceable rights issue, which would net Alara $15.3 million, due to concerns around Oman-based Al Tasnim Enterprises.
Al Tasnim currently owns 13.8 per cent of Oman-focused Alara and fully sub-underwrote the raise, prompting fears that its uptake could leave it primed for an Alara takeover bid.
The Alara shareholder group alleged the control effect of the offer’s ratio, combined with its size, pricing and structure, exceeded Alara’s fundraising needs and appeared to be designed to exacerbate control on the registry by Al Tasnim.
Under ASX listing rules an entity cannot take more than a 20 per cent stake in an entity, with a few exceptions – most notably in the case of a takeover bid.
The shareholders requested Alara change the ratio of entitlement from five-for-eight to one-for-five; that Al Tasnim be treated equally in the allocation of a shortfall; and that ATI is prevented from increasing its stake beyond 19.99 per cent.
The group also requested that shareholder approval be required for any Alara rights issue within the next two years.
In a release to the market today, the Takeovers Panel said Alara had made a series of commitments around its capital raise but stopped short of delivering on the applicant requests.
The company committed not to issue any new shares without prior approval of the Takeovers Panel and said it would hold all money raised by the rights issue separate from its other funds.
Alara operates the joint venture Wash-hi copper-gold mine in Oman, where it was recently grappling a production bottleneck and hopes to acquire tailing filter press infrastructure.
The miner had $3.7 million in the bank at the end of the September quarter, with $7.6 million worth of unused finance available to it.
The company’s market capitalisation is currently just under $40 million.
Alara shares were up 6.5 per cent at 2pm, to 3.3c each.
