Stratmin Global Res - Completion of an Oversubscribed £900,000 Placing
RNS Number : 1626D
Stratmin Global Resources PLC
26 January 2015
 



26 January 2015

 

 

StratMin Global Resources Plc

("StratMin" or the "Company")

Completion of an Oversubscribed £900,000 Placing

StratMin Global Resources Plc (AIM: STGR), the AIM-quoted graphite production and exploration company, announces that it has conditionally raised, in aggregate, gross proceeds of £900,000 through an oversubscribed placing of, in aggregate, 18,947,369 new ordinary shares of 4 pence each (the "Ordinary Shares") at a placing price of 4.75 pence per Ordinary Share (the "Placing Price") (the "Placing Shares") with certain existing and new institutional investors (the "Placees") (the "Placing").

 

The Placing, which has been conducted by Hume Capital Securities plc acting as sole broker, is conditional, inter alia, upon admission of the Placing Shares to trading on AIM.  As part of the Placing, the Company has agreed to issue one warrant to subscribe for one new Ordinary Share for every two Placing Shares subscribed for by Placees, each exercisable at 8 pence per Ordinary Share at any time before 23 January 2016.  The net proceeds of the Placing will be used by the Company to further accelerate the development of the Company's business as described in more detail below.

 

4,842,105 of the Placing Shares (the "First Placing Shares") have been placed firmly with investors under the Company's existing authority to allot shares for cash on a non pre-emptive basis. The placing of the balance of 14,105,264 Placing Shares (the "Second Placing Shares") is conditional on the Company obtaining approval for their allotment from Shareholders at a general meeting of the Company to be convened.

 

A circular relating to the Placing (the "Circular") will be posted to Shareholders on the 27th January 2015. The Circular contains a notice convening a general meeting of the Company to approve certain matters relating to the Placing. The general meeting will be held at the offices of Charles Russell Speechlys LLP, 6 New Street Square, London, EC4A 3LX on 11 February 2015 at 10.00 a.m (the "General Meeting"). The Circular will also be made available tomorrow on the Company's website.

 

Applications will be made to the for the First Placing Shares and the Second Placing Shares to be admitted to trading on AIM and it is currently expected that trading in the First Placing Shares will commence on 30 January 2015 and trading in the Second Placing Shares will commence on 12 February 2015 (assuming the resolutions to be proposed at the General Meeting are approved by Shareholders).

 

Capitalised terms are appended to this announcement and have the same meaning as the Circular, unless the context requires otherwise.

 

 

  

Manoli Yannaghas, Managing Director, commented:

 

"The Company continues to produce and to sell graphite on commercial terms. Grade and volumes from the plant are gradually strengthening and these funds will further help the Company accelerate this progress as we continue to move steadily towards fulfilling our strategic objectives.

 

"I would like to thank all existing shareholders for their continued support and am pleased to welcome a number of new institutions onto the register as part of what was a very well received placing."

 

 

For further information please visit www.stratminglobal.com or contact:

 

Stratmin Global Resources Plc

Manoli Yannaghas (Managing Director)                                                                 +44 (0) 20 7467 1700

 

Strand Hanson Limited (Nominated & Financial Adviser)

James Spinney / Ritchie Balmer                                                                               +44 (0) 20 7409 3494

 

Hume Capital Securities plc (Sole Broker)

Jon Belliss / Abigail Wayne                                                                                         +44 (0) 20 3693 1470

 

Blytheweigh (Financial PR)

Tim Blythe / Halimah Hussain / Camilla Horsfall                                                     +44 (0) 20 7138 3204

 

 

 

 

Background to and reasons for the Placing, including use of proceeds

 

When the Company approached the market in late October last year, it estimated its next twelve month capex and working capital requirements to be approximately £1.5 million. In order to minimise shareholder dilution, the Company elected to raise only £800,000 of this in equity (as announced on 29 October 2014) whilst the balance would be satisfied through a debt agreement, in January 2015, on an external debt facility on which the Company was engaged in early discussions with a potential provider.  Unfortunately, with further analysis, the Board concluded that the debt facility proved prohibitively expensive as a result of the current adverse market conditions, and it was thus decided that the remaining funds would be more economically raised via the equity market.

 

The Company continues to produce and to sell graphite on commercial terms to its main offtake partner, pursuant to the offtake agreement announced on 21 October 2014. Grade and volumes from the plant are gradually strengthening and the net proceeds of the Placing will help the Company accelerate this progress as it continues to meet its strategic objectives. More specifically, the net proceeds will be applied to purchasing further plant machinery, in particular, milling, screening and drying equipment. The Company will also use part of the net proceeds to expand its spare parts inventory to further improve production consistency and reduce plant downtime as a result of a part failure.

 

Issue of Placing Warrants

 

As part of the Placing, the Company has agreed to issue one warrant to subscribe for one new Ordinary Share for every two Placing Shares subscribed for by Placees, each exercisable at 8 pence per Ordinary Share at any time before 23 January 2016. The total number of Placing Warrants issued in conjunction with the Placing will therefore be 9,473,682.

 

The total number of options and warrants outstanding following the issue of the Placing Warrants will be 29,043,096.

 

Issue of Fee Shares

The Company also announces that it has issued, in aggregate, 945,043 new Ordinary Shares to Managing Director, Manoli Yannaghas, and certain other members of senior management, in lieu of un-paid salaries of, in aggregate, approximately £62,000.

 

Following the issue of 334,727 Fee Shares to Manoli Yannaghas, his total shareholding in the Company increases to 640,894 Ordinary Shares, representing an interest of 0.48 per cent. in the Company's Enlarged Share Capital. Mr Yannaghas is also interested in 2,250,000 options over the Company's share capital. The Fee Shares have been issued under the Company's existing authority to allot shares for cash on a non-pre-emptive and will be admitted to trading on AIM at the same time as the First Placing Shares.


Details of the Placing

The Company has conditionally placed the First Placing Shares using the Directors' existing authority to allot shares for cash on a non pre-emptive basis as granted at the Company's most recent AGM held on 9 July 2014.  The placing of the First Placing Shares is expected to raise, in aggregate, gross proceeds of approximately £230,000 and is conditional only on Admission, which is currently expected to occur at 8.00 a.m. on 30 January 2015. Following their Admission, the First Placing Shares will represent approximately 4.1 per cent. of the Company's then enlarged issued ordinary share capital (including the Fee Shares), and they will be eligible to vote on the Resolutions.

 

In addition, the Company has conditionally placed the Second Placing Shares. As the Company will have utilised most of the Directors' existing authority to allot shares for cash on a non pre-emptive basis following Admission of the First Placing Shares, the Proposed Placing of the Second Placing Shares to raise, in aggregate, approximately a further £670,000 gross is conditional upon, inter alia, the passing of the Resolutions at the General Meeting and Admission occurring on or before 12 February 2015 (or such later date as Hume Capital may agree, not being later than 2 March 2015). Following their Admission, the Second Placing Shares will represent approximately 10.6 per cent. of the Company's then enlarged issued ordinary share capital (including the Fee Shares). The Placing Shares will be fully paid and will rank pari passu in all respects with the Company's Existing Ordinary Shares.

 

The Placing has raised, in aggregate, £900,000 before expenses through the issue of, in aggregate, 18,947,369 new Ordinary Shares at a Placing Price of 4.75 pence per share. The Placing Price represents a discount of approximately 22.4 per cent. to the closing middle market price of 6.125 pence per Ordinary Share on 23 January 2015, being the last business day prior to the announcement of the Placing. Completion of the Proposed Placing and the issue of the Second Placing Shares are subject to the passing of the Resolutions at the General Meeting.

 

The Placing is being conducted by way of a non pre-emptive share issue. The Directors believe that this is the most cost effective method to raise funds, avoiding the significant costs of an open offer. The Placing Shares represent approximately 14.3 per cent. of the Enlarged Share Capital. The Placing Shares will, on Admission, be credited as fully paid and will have the same rights in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared. The Placing is conditional, inter alia, upon:

 

(i)           the approval of the Resolutions at the General Meeting (in respect of the Proposed Placing);

(ii)          the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and

(iii)         Admission.

 

The Placing is to be effected on behalf of the Company by Hume Capital, under the terms of the Placing Agreement. Completion of the Placing is subject to certain conditions including, in respect of the Proposed Placing only, the passing of the Resolutions. Under the terms of the Placing Agreement, the Company has agreed to pay Hume Capital a commission fee in consideration for its broking services in respect of the Placing.

 

The Placing Agreement contains certain warranties given by the Company with respect to its business and certain matters connected with the Placing.  The Placing may be terminated by Hume Capital for reasons including, inter alia, a material breach by the Company of the terms of the Placing Agreement or the warranties contained in it or there being a material adverse change in the condition of the Company.

Applications will be made to the for the First Placing Shares and the Second Placing Shares to be admitted to trading on AIM, and it is currently expected that trading in the First Placing Shares and the Second Placing Shares will commence at 8.00 a.m. on 30 January 2015 and 12 February 2015 respectively.

 

The total number of Ordinary Shares in issue following completion of the Firm Placing and the issue of the Fee Shares, and the total number of voting rights, will be 118,421,385. Stratmin does not hold any Ordinary Shares in treasury and accordingly there are no voting rights in respect of any treasury shares. The aforementioned figure of 118,421,385 Ordinary Shares 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 to their interest in, Stratmin under the FCA's Disclosure and Transparency Rules prior to completion of the Proposed Placing.

 

The total number of Ordinary Shares in issue following completion of the Proposed Placing, and the total number of voting rights, will be 132,526,649.  The figure of 132,526,649 Ordinary Shares 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 to their interest in, Stratmin under the FCA's Disclosure and Transparency Rules following completion of the Proposed Placing.

 

Authority to allot shares and dis-application of pre-emption rights

 

As mentioned above, the Directors do not currently have sufficient authority in place under the Articles to undertake the Proposed Placing of the Second Placing Shares and to issue new Ordinary Shares to the holders of existing options and warrants and to holders of the Placing Warrants. Therefore, the Directors are seeking a specific disapplication of pre-emption rights set out in the Articles to allot up to  49,398,360 new Ordinary Shares (representing approximately 43.9 per cent. of the Existing Ordinary Shares as at 23 January 2015) to ensure that the Board has sufficient authority:

 

(i)           to allot and issue 14,105,264 Second Placing Shares;

(ii)          to allot and issue the corresponding number of Ordinary Shares to the holders of existing options and warrants following the exercise of such warrants and options (which total 19,569,414);

(iii)         to allot and issue the corresponding number of Ordinary Shares to the holders of Placing Warrants following the exercise of such warrants (which total 9,473,682); and

(iii)         to have a small additional headroom of 6,250,000 new Ordinary Shares (representing approximately 5 per cent. of the Enlarged Share Capital) to allot and issue equity securities without recourse to the shareholders to afford the Board limited flexibility from time to time as it deems appropriate.

 

This additional authority will enable the Directors to issue small numbers of new options and warrants, to settle external and internal creditors through the issue of shares (rather than  cash payments) and to raise small amounts of additional working capital (if required) to fund potential future work programmes without having to incur the time delay and cost of convening a further general meeting.

This authority will be in substitution for any existing unused authority and will expire at the conclusion of the next annual general meeting of the Company.

 

Concert Party

 

The shareholdings of the Concert Party before and after the Placing and the issue of Fee Shares are set out below:

Name

Number of Ordinary Shares held

% of Ordinary Shares outstanding prior to the issue of the  Placing Shares and Fee Shares

Number of Placing Shares subscribed for in the Placing

Total shareholding following the Placing and issue of the Fee Shares

% of Ordinary Shares outstanding following the issue of the Placing Shares and Fee Shares

Caralapati Raghirah Premraj(1)

16,813,319

14.9%

-

16,813,319

12.7%

Marthinus (Marius) Johannes Hendrik Pienaar

12,150,000

10.8%

-

12,150,000

9.2%

Mrs Kesava Padmavathi

8,100,000

7.2%

-

8,100,000

6.1%

Mrs Caryl Melissa Jane Pienaar

6,500,000

5.8%

-

6,500,000

4.9%

Ghanshyam Champaklal

5,025,000

4.5%

-

5,025,000

3.8%

Srirekam Kesava Purushotham

2,700,000

2.4%

-

2,700,000

2.0%

Jeffrey Royce Marvin

916,667

0.8%

-

916,667

0.7%

Total

52,204,986

46.3%

-

52,204,986

39.4%

(1)  Includes the shares issued to Non-Executive Director, David Premraj, on 31 March 2014

Following completion of the Placing (in which no individual member of the Concert Party has participated) and the issue of the Fee Shares, the Concert Party will hold interests in Ordinary Shares carrying, in aggregate, approximately 39.4 per cent. of the voting rights of the Company.


Notice of General Meeting

 

A notice convening a General Meeting to be held at the offices of Charles Russell Speechlys LLP, 6 New Street Square, London, EC4A 3LX at 10.00 am on 11 February 2015 is set out at the end of the Circular.

 

The Resolutions to be proposed at the General Meeting are as follows:

 

1.            an ordinary resolution to authorise the Directors, for the purpose of section 551 of the Act, to allot Ordinary Shares up to an aggregate nominal value of £1,975,934; and

2.            a special resolution to empower the Directors, for the purpose of section 570 of the Act to disapply pre-emption rights to allot Ordinary Shares pursuant to the authority conferred by Resolution 1.

 

For an ordinary resolution to be passed, more than half of the votes cast must be in favour of the resolution.  For a special resolution to be passed, at least three-quarters of the votes cast must be in favour of the resolution.

 

You should be aware that the issue of the Second Placing Shares cannot take place if the Resolutions are not passed and you are strongly encouraged to vote in favour of both Resolutions.

 

Action to be taken

 

Shareholders will find enclosed with the Circular a Form of Proxy for use at the General Meeting. Whether or not you intend to attend the General Meeting you are requested to complete the Form of Proxy in accordance with the instructions printed on it and to return it to the Company's registrars, Capita Registrars at PXS, 34 Beckenham Road, Beckenham BR3 4TU as soon as possible, and in any event so as to arrive no later than 10.00 a.m. on 9 February 2015. If Shareholders hold Ordinary Shares in CREST they may appoint a proxy using the CREST proxy appointment service by following the instructions in note (7) to the Notice of General Meeting. The completion and return of a Form of Proxy, or the electronic appointment of a proxy will not preclude Shareholders from attending the General Meeting and voting in person should they so wish.

 

Recommendation

 

The Board considers the Placing and the Resolutions are in the best interests of the Company and its Shareholders as a whole.  The Directors therefore unanimously recommend that Shareholders vote in favour of the Resolutions, as they intend to do in respect of their own beneficial and other connected interests, amounting in aggregate to 20,178,390 existing Ordinary Shares (before the issue of 334,727 Fee Shares to Manoli Yannaghas) which represents approximately 17.9 per cent. of the Company's existing issued share capital.

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS


Announcement of the Placing                                                                                                                   26 January
2015

Posting of the Circular to Shareholders                                                                                                  27 January2015

Admission of First Placing Shares to trade on AIM                                                      8.00 a.m. on 30 January 2015

Latest time and date for receipt of completed Forms of Proxy                             10.00 a.m. on 9 February 2015

Latest time and date for receipt of Crest proxy instructions                                  10.00 a.m. on 9 February 2015

General Meeting                                                                                                           10.00 a.m. on 11 February 2015

Admission of Second Placing Shares to trading on AIM                                           8.00 a.m. on 12 February 2015

 

APPENDIX I - DEFINITIONS

 

The following definitions apply throughout this announcement, unless the context requires otherwise:

"Act"

the Companies Act 2006

"Admission"

the admission of the First Placing Shares or the Second Placing Shares, as the case may be, to trading on AIM becoming effective in accordance with the AIM Rules

"AIM"

the AIM Market operated by the

"AIM Rules"

the 's rules and guidance notes contained in its "AIM Rules for Companies" publication relating to companies whose securities are traded on AIM, as amended from time to time

"Articles"

the articles of association of the Company in force on the date hereof

"Board" or "Directors"

the board of Directors of the Company, including a duly constituted committee of such directors

"Circular"

the Shareholder circular to be published in connection with the General Meeting

"Company"

Stratmin Global Resources plc, a company incorporated in England and Wales with company registered number 05173250

"Concert Party"

together, Caralapati Raghirah Premraj, Marthinus (Marius) Johannes Hendrik Pienaar, Mrs Kesava Padmavathi, Mrs Caryl Melissa Jane Pienaar, Ghanshyam Champaklal, Srirekam Kesava Purushotham, Jeffrey Royce Marvin, together with certain companies that they control

"CREST"

the computerised settlement system (as defined in the CREST Regulations) in the UK operated by Euroclear UK & Ireland Limited which facilitates the transfer of title to shares in uncertificated form (as defined in the CREST Regulations)

"CREST Regulations"

the Uncertificated Securities Regulations 2001 (SI 2001/3755) including any enactment or subordinate legislation which amends or supersedes those regulations and any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force;

"Enlarged Share Capital"

the 132,526,649 Ordinary Shares in issue on Admission, comprising the Existing Ordinary Shares, the Placing Shares and the Fee Shares

"Existing Ordinary Shares"

the 112,634,237 Ordinary Shares in issue as at the date of this announcement

"FCA"

the Financial Conduct Authority in its capacity as the competent authority for the purposes of Part VI of FSMA

"Fee Shares"

the issue of, in aggregate, 945,043 new Ordinary Shares to Managing Director, Manoli Yannaghas, and certain other members of senior management, in lieu of un-paid salary of, in aggregate, approximately £62,000;

"Firm Placing"

the placing of the First Placing Shares by Hume Capital at the Placing Price pursuant to the Placing Agreement;

"First Placing Shares"    

the 4,842,105 new Ordinary Shares to be issued pursuant to the Firm Placing or as the first tranche of the Placing;

"Form of Proxy"

the form of proxy which is enclosed with the Circular for use by holders of Ordinary Shares in connection with the General Meeting

"FSMA"

the Financial Services and Markets Act 2000 (as amended)

"General Meeting"

the general meeting of the Company to be held at 10.00 a.m. on 11 February 2015, notice of which is attached to the Circular

"Hume Capital"

Hume Capital Securities plc

" "

plc

"Ordinary Shares"

Ordinary shares of £0.04 each in the capital of the Company

"Placing"

the placing of the Placing Shares at the Placing Price by Hume Capital as agent for and on behalf of the Company pursuant to the terms of the Placing Agreement

"Placing Agreement"

the conditional agreement dated 23 January 2015 between (1) the Company, and (2) Hume Capital, relating to the terms and conditions upon which Hume Capital is engaged by the Company for the purposes of the Placing

"Placing Price"

4.75 pence per Placing Share;

"Placing Shares"

together, the First Placing Shares and the Second Placing Shares to be issued by the Company and subscribed for pursuant to the Placing

"Proposed Placing"

the conditional placing by Hume Capital of the Second Placing Shares at the Placing Price pursuant to the Placing Agreement;

"Placing Warrants"

pursuant to the terms of the Placing Agreement, the issue of one warrant for every two Placing Shares subscribed for by Placees, each exercisable at 8 pence at any time before 23 January 2016;

"Resolutions"

the Resolutions to be proposed at the General Meeting

"Second Placing Shares"

the 14,105,264 new Ordinary Shares to be issued pursuant to the Proposed Placing or as the second tranche of the Placing;

"Shareholders"

the holders of Ordinary Shares of the Company from time to time

"UK"

the United Kingdom of Great Britain and Northern Ireland

"uncertificated" or "in uncertificated form"

recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST

 "£"

the legal currency of the UK

 


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