Ordinary Shareholder’s Approval Mandatory For Equity Issuance By VIC, To A Blumenthal Party


As per latest advisory issued by ASX to Victory Mines Limited (ASX: VIC) , ASX Listing Rule 10.11.2 applies concerning any issue of equity securities by VIC to the Blumenthal Parties.

ASX Listing rule

As per the letter dated 27th November 2018, the relationships between the directors of VIC and the Blumenthal Parties (Adam and Darrin Blumenthal and the owned entities) will require approval by the ordinary shareholders of VIC in case of any issue of equity securities. The Blumenthal Parties and their associates will not be allowed to vote to approve such issues.

Victory Mines Limited, based in Western Australia, is a mineral explorer and developer.  [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]

The company did not agree to ASX conditions but agreed that the application of Listing Rule 10.11.2 is as per the exchange regulations. ASX has the power to form the opinion if ASX Listing Rule 10.11.2 is applicable in relation to any issue of equity securities by the company to the Blumenthal Parties.

Considering this, the company has agreed to seek approval of its ordinary shareholders for any future issue of equity securities to a Blumenthal Party under and in accordance with ASX Listing Rule 10.11.2.

Trading Halt and Proposed Acquisition Plan

A trading halt was requested by the company on 7th September 2018. This was when the company was in the process of having an acquisition agreement executed for acquiring a mineral exploration project, which did not materialize.

The company had sought and received, confirmation from ASX that Chapter 11 of the ASX Listing Rules would not apply to the Proposed Transaction.  As a result of a drop in the Company’s share price prior to the trading halt being requested, the Company resolved to undertake the capital raising at a valuation below that which was initially contemplated to increase the likelihood of successfully raising the capital required.

The company received confirmation that a reduction in the issue price under the capital raising and the resulting increase in the number of securities to be issued under the capital raising would not change ASX’s decision that Chapter 11 of the ASX Listing Rules would not apply to the Proposed Transaction.

VIC and vendors mutually agreed to shelf the acquisition. The major reason was the ongoing suspension of securities trading halt and uncertainty of its lift. Also, the drop in share price meant capital was raised at a lower price.

Proposed capital raising

The company got the shareholder’s approval at its annual general meeting held on 30 November 2018 to complete placement of up to 750,000,000 shares at an issue price of not less than 80% of the average market price over the five days. The sales in shares were recorded before the date of issue.

The last traded price of the stock is $0.005. The stock has following a downward trend over a year to yield a YTD of -64.29%.


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