Investment house, Washington H. Soul Pattinson & Company Limited (ASX: SOL) is having its investments in various companies which belongs to different industries. Currently, the company holds around 33.4% shares in Verdant Minerals Limited, a company that discovers, develops and operates fertilizer and industrial mineral projects, located in Northern Territory of Australia. The company is currently focused on developing its wholly owned world class Ammaroo Phosphate Project located in Northern Territory of Australia.
On 11 March 2019, Verdant Minerals Limited announced that it has entered into a scheme implementation agreement regarding the acquisition by CD Capital Natural Resources Fund III LP, of all of the issued shares in VRM, other than any shares held by Washington H. Soul Pattinson and Company Limited (WHSP) through a scheme of arrangement under the Corporations Act 2001 (Cth). CD Capital is a London based Private Equity Firm which identifies and invests in world-class mining and resource assets.
After the implementation of the Scheme, VRM shareholders other than WHSP will receive $0.032 per VRM share held as at the Scheme record date.
As per VRM’s Managing Director, Chris Tziolis, the offer from CD Capital, is representing a 113% premium to VRM’s share price on 8 March 2019 of $0.015 and it is demonstrably accretive to the company’s shareholders on the basis of the company’s share price and market capitalization.
He further informed that the advancement of the company’s 100% owned Ammaroo Phosphate Project will require significant capital which, at the market capitalization and share price prior to the offer, is highly unlikely to be raised from existing shareholders and without very significant dilution. With his fellow independent Directors, Mr. Chris Tziolis has also voted to recommend CD Capital’s proposal to VRM’s shareholders.
After the implementation of the scheme, CD Capital will hold around 67% of the shares in VRM and WHSP will continue to hold approximately 33% of the shares in VRM. Currently, it is expected that VRM would be de-listed from ASX.
CD Capital, WHSP and VRM have entered into a shareholders’ agreement to govern the management of the company which will come into effect after the implementation of the Scheme.
WHSP has provided a letter to VRM stating that it intends to consent to the Scheme on the terms and conditions of the SIA, in the absence of a superior proposal and provided the deed of an irrevocable undertaking entered into by WHSP in favour of CD Capital is not terminated in accordance with its terms.
VRM and CD Capital have also entered into a short-term loan facility agreement under which CD Capital will advance an aggregate of $800,000 in three tranches to VRM for the purposes of funding VRM’s transaction costs in connection with the Scheme and for general working capital requirements.
S&P Dow Jones Indices recently announced the addition of WHSP to the S&P/ASX 100 Index.
In the past six months, the share price of SOL increased by 24.36% as on 8 March 2019. SOL’s shares traded $30.150 (+0.166% intraday) with a market capitalization of circa $7.21 billion as on 11 March 2019. Its 52 weeks high of $31.870 and 52 weeks low of $16.910 with an average volume of ~384,498.
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