Contango Holdings PLC Acquisition of Lubu Coalfield Project, Zimbabwe (5052V)
09 April 2019 - 4:00PM
UK Regulatory
TIDMCGO
RNS Number : 5052V
Contango Holdings PLC
09 April 2019
Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural
Resources
9 April 2019
Contango Holdings Plc
("Contango" or the "Company")
Acquisition of the Lubu Coalfield Project, Zimbabwe
Further to the announcement of the signing of a Memorandum of
Understanding relating to the possible acquisition of Consolidated
Growth Holdings Limited's ("CGH") interest in the Lubu Coalfield
project in Zimbabwe (the "Lubu Coalfield"), the board of the
Company are pleased to announce that on 8 April 2019 the Company
entered into a Share Purchase Agreement to acquire the Lubu
Coalfield from CGH (the "Acquisition"). The Company will satisfy
the acquisition consideration of GBP6,450,000 by issuing
128,849,961 ordinary shares to CGH at a price of GBP0.05 each (the
"Consideration Shares"). This transaction constitutes a reverse
takeover under the Listing Rules and the Company will issue a
prospectus containing further details of the Acquisition in due
course (the "Prospectus").
The Lubu Coalfield
The Lubu Coalfield is a potential thermal and coking coal
project. Following completion of the Acquisition, the Company
initially intends to commence trial mining and carry out bulk
samples to determine the viability of full-scale production.
The Lubu Coalfield is permitted for trial mining. Existing cash
resources and new funds to be raised by way of a placing by the
Company of new ordinary shares (the "Placing Shares") (the
"Placing") will be applied to site preparation and refurbishment to
facilitate modest production levels and early cashflow. The Company
intends to sell the coal product generated in this phase to
regional power companies in Zimbabwe and other industrial
users.
Details of the Share Purchase Agreement
As noted above, the Company has entered into a conditional share
purchase agreement ("SPA") on 8 April 2019 with (1) Someden
Investments (Private) Limited ("Someden") (2) Monaf Investments
(Private) Limited ("Monaf") (both Someden and Monaf being
subsidiaries of CGH) and (3) CGH to implement the sale and purchase
of 70% of the issued share capital of Monaf ("Sale Shares"), the
novation of certain debts owing to CGH by Monaf ("CGH-Monaf Loans")
and the transfer of certain mining data owned by CGH ("Mining
Data").
The consideration payable for the Sale Shares, CGH-Monaf Loans
and Mining Data is GBP6,450,000. This will be satisfied by the
Company issuing the Consideration Shares to CGH.
The SPA sets out a number of conditions precedent, which must be
satisfied in order to effect the transaction, such conditions being
typical in a transaction of this nature. The SPA also contains
commercial warranties, which are to be given by Someden and CGH,
and a tax covenant, which is to be met by Someden.
Conditions to be satisfied
The principal conditions which require satisfaction are as
follows:
a) the Takeover Panel having agreed that, subject to the passing
of a resolution of the shareholders of the Company, the allotment
of Consideration Shares to CGH will not give rise to an obligation
to make an offer for all the Ordinary Shares of the Company
pursuant to Rule 9 of the Takeover Code;
b) obtaining all necessary and applicable Zimbabwean regulatory approvals/clearances;
c) the Company undertaking the Placing;
d) the passing of resolutions by shareholders of the Company to:
i. waive any requirement that might otherwise arise under Rule 9
of the Takeover Code for CGH to make a general offer for all the
Ordinary Shares of the Company;
ii. dis-apply statutory pre-emption rights in respect of the
allotment of the Consideration Shares and the Placing Shares;
and
iii. authorise the re-admission of the Company's existing share
capital and the admission of the Consideration Shares and the
Placing Shares to trading on the standard segment of the Main
Market of the London Stock Exchange.
Timetable to re-admission of the Company to trading on the Main
Market
The Company is working with its professional advisory team to
complete all the outstanding work required and preparing a new
prospectus to comply with re-admission of the Company on the
standard segment of the Main Market of the London Stock Exchange
which is anticipated to occur by the end of Q2 2019. The Company
will continue to update shareholders in due course.
* ENDS *
For further information, please visit
www.contango-holdings-plc.co.uk or contact:
Contango Holdings plc E: info@contango-holdings-plc.co.uk
Brandon Hill Capital Limited T: +44 (0)20 3463 5000
Financial Adviser & Broker
Jonathan Evans
St Brides Partners Ltd T: +44 (0)20 7236 1177
Financial PR & Investor Relations
Catherine Leftley/Cosima Akerman
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END
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