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Summary
- 9 December will be the last day of dealings in its ordinary shares of Tri-Star Resources Plc
- The company had announced that a joint venture for investment in Strategic & Precious Metals Processing LLC requires it to delist from the AIM market
- Of late, Tri-Star has been under financially stress due to cost and time escalations in its flagship investment that needed significant fund infusion
Minerals processing company Tri-Star Resources plc has moved a resolution in its AGM held today to delist the company from the AIM market of the London Stock Exchange. The delisting resolution along with all other resolutions proposed were duly passed by all participants. As per the company release, the last day of dealings in its ordinary shares will be 9 December, while on the next day (10 December) at 7 am the AIM admission will be cancelled.
The delisting decision was first communicated on 3 November. The settlement that Tri- Star has reached with its joint venture partners Oman Investment Authority and DNR Industries in the Strategic & Precious Metals Processing LLC (SPMP) project, requires it to lose its seat in the board of SPMP.
The company will put in place an auction-based secondary market trading facility, whose details will be announced later.
Financial troubles
Tri-Star is finding it difficult in funding the remaining capital investment and operating costs of the SPMP project, for which it had sought additional funding from its joint venture partners.
The company had published its half yearly report on 9 November for the period ending 30 June. It reported a comprehensive loss of £1.389 million. The diluted loss stood at a value of 1.42 pence per share. The group’s cash and cash balances stood at a figure of £58,000.
Settlement agreement
As per the new settlement agreement, all future funding required to complete the capital investments and working capital requirements for the SPMP project will be provided by the JV in exchange for equity of the company. Tri-Star’s investment in the project will comprise of 16.3 per cent equity and 16.3 per cent equity loans.
Prospects for investors
The good thing about the settlement agreement is that there will be no equity dilution of Tri- Star resources in the project. The problem that the investors will face if the company is delisted is that their shares will become less liquid.
In terms of improvement in the prospects of the project, it will receive fresh funding that helps in an early commissioning of its manufacturing facilities. The value of shares held by the investors will thus increase and they would be able to sell them at a profit.
Share price performance
(Source: EODHD/Others, Thomson Reuters)
The shares of Tri- Star Resources plc (LON:TSTR) has fallen sharply ever since the company announced the settlement agreement (9 November). The shares were trading at GBX 4.90 per share as on 2 December, (12.46 PM GMT+1) gaining 22.50 per cent over the previous day’s close.
