Evolving shareholding structure of Coking Coal Developer Aspire Mining in line with OEDP

  • Nov 29, 2019 AEDT
  • Team Kalkine
Evolving shareholding structure of Coking Coal Developer Aspire Mining in line with OEDP

Australian metals and mining sector company, Aspire Mining Limited (ASX: AKM) is focussed on advancement of first stage, the Ovoot Early Development Plan (OEDP), of its flagship world-class and premium coking coal asset-the Ovoot Coking Coal Project (100%-owned) located in the Orkhon-Selenge Coal Basin in northern Mongolia.

The company aims to deliver increasing shareholder returns while contributing to the social and economic well-being and upliftment of local communities.

Shareholders are the owners of a company and play a crucial role, indirectly through the stock market, in the financing, operations, governance and control aspects of a business. A shareholder’s most straightforward job is to provide funds. Investors like to invest in companies that consistently beat earnings expectations and therefore, the company management is usually under presssure to be at par with the sales and profit projections. Specifically, shareholders of companies having significant free cash flow often create pressure to companies to pay out this surplus in the form of dividends or share buybacks to shareholders.

The market cap of Aspire Mining stands at around AUD 46.57 million with approximately 3.33 billion shares outstanding. The AKM stock closed at AUD 0.013 on 29 November 2019. AKM has also generated 5-day positive returns of 8.33% respectively.

The company’s Shareholder Composition is illustrated in the figure below-

AKM Shareholding

However, in line with pursuing early production of washed coking coal under the OEDP, Aspire Mining has been exploring options to procure optimal funds for project financing with discussions ongoing with major shareholder Mr Tserenpuntsag. Preliminary interest has also been received by some specialist financiers for the provision of debt funding for mine, wash plant and road.

Placement to Major Shareholder Mr. Tserenpuntsag

A Share Subscription Deed had been reached by Aspire Mining with its key shareholder Mr Tserenpuntsag Tserendamba, for raising ~ $ 33.5 million (before costs) to fast track OEDP delivery.

Key features of this proposed placement include-

  • Issue of 1,595,900,000 ordinary fully paid shares at AUD 0.021 each, representing a premium of 40% to the closing price of AUD 0.015 on 4 September 2019 and 27.7% to the 30-day (to 4 September 2019) VWAP of AUD 0.01645 per Aspire Mining share.
  • Increase in Mr. Tserenpuntsag’s ownership in Aspire Mining from 27.5% to 51.0%.

Around $100 million in debt or project financing concerning the OEDP in the future is also assured by Mr Tserenpuntsag as further assistance. He also assured that the interest of minority shareholders, during the transition period, will be taken care of as there will be no board changes for the first six months after placement and all shareholders will have equivalent opportunity to apply for new equity issues that may take place anytime during next 12 months, post placement.

Later on 13 November 2019, Aspire Mining received further commitments from Mr Tserenpuntsag, as part of the proposed $ 33.5 million equity investment, that he would also exercise his 53.3 million listed options (Expiry Date: 11 December 2019) in Aspire Mining at 1.8 cents each, which is 50% above the ongoing Aspire Mining share price of 1.2 cents and strongly validates the financial support being provided by Mr Tserenpuntsag at a critical time period when the company is targeting near-term production of fat” coking coal and completing the Definitive Feasibility Study (DFS).

Mr Tserenpuntsag stake and AKM Shareholding after Placement

Once the placement is completed and options are exercise, Mr Tserenpuntsag’s interest in Aspire Mining would be 52.5%, given no other shareholders exercise their options.

Given the viability of this placement and requirement for funds, Aspire Directors are unanimously recommending that shareholders support the placement to Mr Tserenpuntsag in the absence of a superior proposal.

Mr Tserenpuntsag also stated that he would ensure maintenance of the Board structure including five Directors with two Directors nominated by him. Additional commitments are also there to protect the interest and representation of minority shareholders.

This proposed offer is now subject to shareholder approving the same at Aspire Mining’s Annual General Meeting to be held on 29 November 2019.

Read more:

Coking coal project developer, Aspire Mining receives further Undertakings from Mr Tserenpuntsag

Aspire Mining’s Strategic Repositioning: Placement to Mr. Tserenpuntsag & Leadership Changes


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is sponsored but NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. We are neither licensed nor qualified to provide investment advice through this platform.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK