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Mineral and exploration company, Havilah Resources Limited (ASX: HAV) has published its response regarding a Shareholder Document which was prepared by Dr. Bob Johnson. As per the company, the document was not provided to the Company by Dr. Bob Johnson, and it contains multiple factual inaccuracies and statements that the Company considers to be misleading. Following this news, the share price of the company decreased by 3.03% on January 21, 2019.
The Company believes that the content of such inaccuracies and misleading statements may damage the Companyâs reputation and undermine confidence in its financial situation. Further, the company also believes that the document could result in negative implications for the Companyâs share price, transactions it may wish to pursue and opportunities to raise funds.
The shareholder document contains a statement that says that the Company is âladen with debtâ. As per the company, this is both factually incorrect and misleading. The company has earlier informed that it has entered into a stand-by facility with the Investec Group and till now the Company has drawn down $2.5 million of this facility, but utilized only $0.7 million, leaving the Company with a cash reserve of $1.8 million and a net debt position of $0.7 million. Further, the company is also having net assets of $45.08 million. In light of this financial situation, there is no reasonable basis upon which to describe the Company as âladen with debt.â
The shareholder document also contains information about the nomination of two new directors. As per the company, both the persons nominated were ineligible to be elected as directors at the EGM as per the Companyâs constitution.
In respect of the statement regarding âSteps need to be taken to raise capital to repay this debt and regain control of the Companyâs destinyâ, the Company has informed that capital raisings can often increase the shareholding of major shareholders at the expense of minority shareholders, particularly when conducted at a time when the Companyâs share price is lower.
At the recently held Annual General Meeting (AGM), Mr. Mark Stewart was elected as a Director of the company by the shareholders by a substantial margin. However, the current resolution for the removal of Mr. Stewart, having just been elected by the shareholders, ignores the result of the AGM and the votes of the shareholders at the AGM. This is why the company believes that the calling and holding the EGM has unnecessarily caused the Company to spend time and resources that should have been towards achieving the desired objectives of the Company.
The Company has asked the shareholders to work cooperatively with the present Board and management to achieve the mutually desired objectives of the Company for the benefit of all shareholders, rather than continuing to cause the Company to expand its resources on calling and holding further meetings.
Meanwhile, in the last six months, the share price of the company decreased by 28.26 percent as on 18 January 2019. HAVâs shares traded at 0.160 with the market capitalization of circa $36.01 million as on 21 January 2019 (AEST 4:00 PM).
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