TIDMRRL
RNS Number : 7008O
Range Resources Limited
01 February 2019
Notice of Meeting
Range, an international company with oil and gas projects and
oilfield service businesses in Trinidad and Indonesia, today
releases its Notice of Meeting and Independent Expert's Report
(IER). A copy of the full Notice of Meeting and IER is available on
the Company's website www.rangeresources.co.uk and also the
Australian Securities Exchange website www.asx.com.au (ASX code:
RRS).
Notice of General Meeting
Notice is given that the Meeting will be held at:
Time: 10:00am (WST)
Date: 5 March 2019
Place: Edwards Mac Scovell
Level 7, 140 St Georges Terrace
PERTH WA 6000
Important
The business of the Meeting affects your shareholding and your
vote is important.
This Notice of General Meeting should be read in its entirety.
If Shareholders are in doubt as to how they should vote, they
should seek advice from their professional advisers prior to
voting.
The Directors have determined pursuant to Regulation 7.11.37 of
the Corporations Regulations 2001 (Cth) that the persons eligible
to vote at the Meeting are those who are registered Shareholders at
7:00pm (Sydney time) on 3 March 2019.
Business of the Meeting
Agenda
1. Resolution 1 - Approval to issue Shares to LandOcean
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, for the purposes of item 7 of section 611 of the
Corporations Act, and for all other purposes, approval is given for
the Company to issue Shares to LandOcean in accordance with the
Subscription Agreement and the acquisition by LandOcean and its
Associates of a relevant interest in the issued voting shares of
the Company resulting from the issue of Shares in accordance with
the Subscription Agreement and on the conversion of Convertible
Notes held by LandOcean, which is otherwise prohibited by section
606(1) of the Corporations Act, and which may result in LandOcean's
and its Associates voting power in the Company increasing to a
maximum of 32.6% and otherwise on the terms and conditions set out
in the Explanatory Statement."
Voting Exclusion
No votes may be cast in favour of this Resolution by:
(a) the person proposing to make the acquisition and their associates; or
(b) the persons (if any) form whom the acquisition is to be made and their associates.
Accordingly, the Company will disregard any votes cast on this
Resolution by LandOcean and any of its Associates.
Independent Expert's Report: Shareholders should carefully
consider the report prepared by the Independent Expert for the
purposes of the Shareholder approval required under item 7 of
section 611 of the Corporations Act. The Independent Expert's
Report comments on the fairness and reasonableness of the
transaction the subject of this Resolution to the non-associated
Shareholders in the Company and concluded that the issue of Shares
to LandOcean and its Associates is FAIR AND REASONABLE to the
non-associated Shareholders in the Company.
Dated: 30 January 2019
By order of the Board
Nick Beattie
Company Secretary
Voting in person
To vote in person, attend the Meeting at the time, date and
place set out above.
Voting by proxy
To vote by proxy, please complete and sign the enclosed Proxy
Form and return by the time and in accordance with the instructions
set out on the Proxy Form.
In accordance with section 249L of the Corporations Act,
Shareholders are advised that:
-- each Shareholder has a right to appoint a proxy;
-- the proxy need not be a Shareholder of the Company; and
-- a Shareholder who is entitled to cast 2 or more votes may
appoint 2 proxies and may specify the proportion or number of votes
each proxy is appointed to exercise. If the member appoints 2
proxies and the appointment does not specify the proportion or
number of the member's votes, then in accordance with section
249X(3) of the Corporations Act, each proxy may exercise one-half
of the votes.
Shareholders and their proxies should be aware that changes to
the Corporations Act made in 2011 mean that:
-- if proxy holders vote, they must cast all directed proxies as directed; and
-- any directed proxies which are not voted will automatically
default to the Chair, who must vote the proxies as directed.
United Kingdom (CREST Voting Instruction)
DI Holders in CREST may transmit voting instructions by
utilising the CREST voting service in accordance with the
procedures described in the CREST Manual. CREST personal members or
other CREST sponsored members, and those CREST members who have
appointed a voting service provider, should refer to their CREST
sponsor or voting service provider, who will be able to take
appropriate action on their behalf.
In order for instructions made using the CREST voting service to
be valid, the appropriate CREST message (a "CREST Voting
Instruction") must be properly authenticated in accordance with
Euroclear's specifications and must contain the information
required for such instructions, as described in the CREST Manual
(available via www.euroclear.com/CREST).
To be effective, the CREST Voting Instruction must be
transmitted so as to be received by the Company's agent (3RA50) no
later than 27 February 2019 at 4:00pm (GMT). For this purpose, the
time of receipt will be taken to be the time (as determined by the
timestamp applied to the CREST Voting Instruction by the CREST
applications host) from which the Company's agent is able to
retrieve the CREST Voting Instruction by enquiry to CREST in the
manner prescribed by CREST. DI Holders in CREST and, where
applicable, their CREST sponsors or voting service providers should
note that Euroclear does not make available special procedures in
CREST for any particular messages. Normal system timings and
limitations will therefore apply in relation to the transmission of
CREST Voting Instructions. It is the responsibility of the DI
Holder concerned to take (or, if the DI Holder is a CREST personal
member or sponsored member or has appointed a voting service
provider, to procure that the CREST sponsor or voting service
provider takes) such action as shall be necessary to ensure that a
CREST Voting Instruction is transmitted by means of the CREST
voting service by any particular time.
In this connection, DI Holders and, where applicable, their
CREST sponsors or voting service providers are referred, in
particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.
United Kingdom (Form of Instruction)
DI Holders are invited to attend the Meeting but are not
entitled to vote at the Meeting. In order to have votes cast at the
Meeting on their behalf, DI holders must complete, sign and return
the Forms of Instruction forwarded to them along with the Notice to
the Company's agent, Computershare UK, by 27 February 2019 at
4:00pm (GMT).
Should you wish to discuss the matters in this Notice of Meeting
please do not hesitate to contact the Company by telephone on +61 8
6205 3012 or +44 (0) 20 3865 8430.
Explanatory Statement
This Explanatory Statement has been prepared to provide
information which the Directors believe to be material to
Shareholders in deciding whether or not to pass the
Resolutions.
1. Resolution 1 - Approval to issue Shares to LandOcean
1.1 Background
As announced on ASX on 31 October 2016, Range entered into a
convertible note deed (Convertible Note Agreement) with LandOcean
Energy Services Co., Ltd. (LandOcean) pursuant to which LandOcean
subscribed for US$20,000,000 worth of unlisted unsecured
Convertible Notes with an annual interest rate of 8% which have a
face value of US$1.00 each (Convertible Notes).
The Company and LandOcean are parties to the Integrated Master
Services Contract dated 29 May 2014 (IMSC) under which LandOcean
provides various oilfield services to the Company. A subsidiary of
the Company is also party to an agreement for the provision of oil
and gas consultancy, petroleum, equipment rental, property
management and labour and procurement services in Trinidad
(Trinidad Agreement). As at the date of entering into the
Convertible Note Agreement the Company had incurred fees of
approximately US$35,900,000 under the IMSC and the Trinidad
Agreement (Accrued Fees).
Pursuant to a deed executed by the Company and LandOcean,
LandOcean agreed to waive its entitlement to US$20,000,000 of the
Accrued Fees in exchange for the issue of the Convertible Notes
(IMSC Amending Deed). The Convertible Notes were issued on 28
November 2016 conditional on shareholder approval, which was
obtained on 7 February 2017. The proceeds from the Convertible
Notes were utilised solely to replace a portion of the outstanding
payable balance due to LandOcean under the terms of the IMSC and
the IMSC Amending Deed.
Under the Convertible Note Agreement, the Company must pay
yearly interest instalments in cash on each anniversary of the
issue date of the Convertible Notes.
On 20 December 2018, the Company announced the Company and
LandOcean had entered into a subscription and variation agreement
(Subscription Agreement) pursuant to which LandOcean has agreed to
defer the payment date for the total amount of interest due and
payable by the Company to LandOcean under the Convertible Note
Agreement on the interest payment date falling in the 2018 calendar
year, being US$1,600,000 (Accrued Interest), and to allow the
Company to pay the Accrued Interest by way of issuance of Shares to
LandOcean on the terms and conditions of the Subscription
Agreement, including the Company obtaining Shareholder approval for
the issuance.
Details of the material terms and conditions of the Convertible
Note Agreement and the Subscription Agreement are set out
below.
1.2 Shareholder approval requirements
On 7 February 2017, the Company previously obtained Shareholder
approval pursuant to item 7 of section 611 of the Corporations Act
for the issue of Shares on conversion of the Convertible Notes
which would otherwise be prohibited by section 606(1) of the
Corporations Act (Prior Approval).
Given the additional Shares to be issued pursuant to the
Subscription Agreement the maximum voting power that may be
acquired by LandOcean and its Associates as approved under the
Prior Approval may be exceeded. On this basis, the Company is
seeking fresh Shareholder approval for the purpose of item 7 of
section 611 of the Corporations Act to allow the Company to issue
Shares to LandOcean pursuant to the Subscription Agreement as well
Shares on conversion of the Convertible Notes.
ASX Listing Rule 7.1 provides that a company must not, subject
to specified exceptions, issue or agree to issue more equity
securities during any 12 month period than that amount which
represents 15% of the number of fully paid ordinary securities on
issue at the commencement of that 12 month period.
Pursuant to ASX Listing Rule 7.2 (Exception 16), ASX Listing
Rule 7.1 does not apply to an issue of securities approved for the
purpose of item 7 of section 611 of the Corporations Act.
Accordingly, if Shareholders approve the issue of securities
pursuant to this Resolution 1, the Company will retain the
flexibility to issue equity securities in the future up to the 15%
annual placement capacity set out in ASX Listing Rule 7.1.
1.3 About LandOcean
LandOcean is headquartered in Beijing, China and is active both
in the international and domestic Chinese markets by serving the
oil and gas industry with a wide spectrum of services, from R&D
of high-end technology, to product sales and technical services.
LandOcean is a listed high-tech company on the Growth Enterprise
Market of the Shenzhen Stock Exchange (Stock code: 300157).
LandOcean's capabilities include: a) R&D and
commercialization of petroleum exploration and development
software, oil and gas equipment, downhole equipment, as well as
instrument technology; b) global sales of petroleum exploration and
development software, oil and gas equipment, downhole equipment, as
well as instrument technology; and c) providing technical services
utilizing petroleum exploration and development software, oil and
gas equipment, downhole equipment, as well as instrument
technology.
1.4 Convertible Note Agreement
The material terms of the Convertible Note Agreement are as
follows:
(a) Convertible Notes
LandOcean (or its Associates) has subscribed for US$20,000,000
of unlisted unsecured convertible notes with an 8% per annum coupon
which have a face value of US$1.00 each.
The Convertible Notes are redeemable by LandOcean after 3 years
of issue (Maturity Date) or earlier if a redemption event occurs
(such as non-payment of annual interest payments). Subject to
converting at least US$10,000,000 of Convertible Notes (Minimum
Conversion Amount), LandOcean may elect to convert the Convertible
Notes into Shares at a conversion price of GBP0.0088 per Share
(Conversion Price) at any time prior to the Maturity Date.
Range also has the option of redeeming the Convertible Notes for
cash at any time prior to the Maturity Date. Range must also pay
yearly interest instalments, on each anniversary of the issue date
of the Convertible Notes, in cash.
Further terms and conditions of the Convertible Notes are set
out in Schedule 1.
(b) Nominee Directors
Following issue of the Convertible Notes, for so long as:
(i) the aggregate face value of the Convertible Notes held by
LandOcean combined with the aggregate market value of any Shares
issued on conversion of any Convertible Notes (which is to be based
on the 30 day VWAP and converted into US$ at the applicable
exchange rate) is greater than US$10,000,000, LandOcean may appoint
one nominee as a Director; and
(ii) the aggregate face value of the Convertible Notes held by
LandOcean combined with the aggregate market value of any Shares
issued on conversion of any Convertible Notes (which is to be based
on the 30 day VWAP and converted into US$ at the applicable
exchange rate) is equal to or greater than US$20,000,000, LandOcean
may appoint an additional nominee as a Director.
If LandOcean ceases to satisfy the thresholds above, then it
must procure that the relevant nominee Director resigns from the
board of the Company.
At the date of this Notice, LandOcean has not sought to appoint
nominee Directors, but it may exercise this right in the
future.
The election or re-election of these nominee directors (as
relevant) will be subject to the provisions of the Company's
Constitution and other applicable law (including approval of the
Company's nominated adviser for the purpose of its AIM
listing).
1.5 Subscription Agreement
The material terms of the Subscription Agreement are as
follows:
(a) Variations to the Convertible Note Agreement
With effect from the date of the Subscription Agreement, the
interest payment date for the interest due and payable under the
Convertible Note Agreement for the 12 month period to 28 November
2018, being US$1,600,000, is deferred until the earlier of the date
the Subscription Agreement is terminated and the date on which the
condition precedent is satisfied (Completion Date).
The issue of Shares to LandOcean under the Subscription
Agreement will be in full and final satisfaction of the Company's
obligation to pay the Accrued Interest to LandOcean under the
Convertible Note Agreement.
(b) Condition precedent
Completion of the issue of Shares under the Subscription
Agreement is conditional on and does not become binding unless and
until Shareholders have approved the issue of Shares to
LandOcean.
If Shareholder approval is not obtained prior to 15 March 2019
(Cut Off Date), or the Subscription Agreement is terminated, the
Company must pay the Accrued Interest to LandOcean in immediately
available funds on the Cut Off Date.
(c) Subscription and issue
The number of Shares to be issued to LandOcean on the Completion
Date will be calculated as follows:
Accrued Interest (converted into Australian dollars at the
Exchange Rate) / Subscription Price
Where:
Accrued Interest means the total amount of interest due and
payable by the Company to LandOcean pursuant the Convertible Note
Agreement on the Interest Payment Date (as defined in the
Convertible Note Agreement) falling in the 2018 calendar year,
being US$1,600,000.
Exchange Rate means at any time, the mid-rate which appears on
the Bloomberg Screen "USDAUD" at or about 11:00am Sydney time on
that day.
Subscription Price means the amount per Share equal to the
average of the daily volume weighted average sale price of Shares
traded on the ASX during the 90 Trading Days prior to the
Completion Date without reference to the sale price of Shares sold
in:
-- any transaction defined in the ASX Operating Rules as "special";
-- crossings prior to the commencement of normal trading;
-- crossings during the after hours adjust phase;
-- overnight trades; or
-- trades arising from the exercise of options in respect of Shares.
1.6 Effect of the transaction on the Company
(a) Capital structure
Below is a table showing the Company's current capital structure
and the possible capital structure on completion of the issue of
Shares under the Subscription Agreement and also under the
Convertible Note Agreement. This table assumes the Company does not
issue any additional Shares and no Options expire, or are
exercised, prior to the date that all of the Convertible Notes have
converted.
Shares Options(1) Convertible
Notes(2)
Balance at the date
of this Notice 8,504,921,692 437,643,136 20,000,000
------------------------ -------------- -------------
Balance following
issue of Shares
in satisfaction
of Accrued Interest
under the Subscription
Agreement (rounded
up) 10,746,979,901(3,6) 437,643,136 20,000,000
------------------------ -------------- -------------
Balance following
issue of Shares
on conversion of
the Convertible
Notes under the
Convertible Note
Agreement (rounded
up) 12,616,152,755(4,5,6) 437,643,136 Nil
------------------------ -------------- -------------
Notes:
1. Comprising 194,585,862 unlisted Options exercisable at
GBP0.01 on or before 3 September 2019, 172,557,274 unlisted Options
exercisable at GBP0.02 on or before 3 September 2019 and 70,500,000
unlisted Options exercisable at GBP0.01 on or before 30 March
2020.
2. Issued on 28 November 2016 conditional on shareholder
approval, which was obtained on 7 February 2017. The terms and
conditions are summarised in Schedule 1.
3. This number assumes a Subscription Price of A$0.001 (being
the closing price of Shares on ASX since 9 October 2018) and an
AUD/USD exchange rate of 0.7136 as at 24 January 2019. Based on its
definition, the Subscription Price cannot be lower than
A$0.001.
4. This number assumes a Conversion Price of GBP0.0088 and an
GBP/USD exchange rate of 1.216 as at 27 October 2016 (being the
Business Day prior to date the Company entered into the Convertible
Note Agreement). For details of other scenarios possible as a
result of an alternate Conversion Price and the effect this would
have on the capital structure of the Company refer to Schedule
2.
5. Assumes all of the Convertible Notes are converted to Shares
prior to the expiry date of the Convertible Notes.
6. The Company may issue a differing number of Shares, but has
included this disclosure as a theoretical number of Shares
LandOcean may be issued in such circumstances. For details of other
scenarios possible as a result of an alternate Subscription Price
or Conversion Price after applicable foreign currency conversion
(as the context requires) and the effect this would have on the
capital structure of the Company refer to Schedule 2.
(b) Voting power of LandOcean and its Associates
Under the Subscription Agreement, LandOcean has agreed to
receive Shares in full and final satisfaction of the Company's
obligation to pay the Accrued Interest to LandOcean pursuant to the
Convertible Note Agreement.
The Convertible Notes were issued on 28 November 2016. Subject
to converting the Minimum Conversion Amount, LandOcean may elect to
convert the Convertible Notes into Shares at the Conversion Price
at any time prior to the Maturity Date.
Neither LandOcean, nor any of its Associates, currently hold any
Shares in the Company.
Refer to Schedule 2 for full particulars (including the number
and percentage) of Shares in which LandOcean has, or will have, a
relevant interest in immediately before and after the issue of
Shares to LandOcean under the Subscription Agreement, as well after
conversion of the Convertible Notes (assuming all of the
Convertible Notes are converted into Shares).
(c) Increase or decrease in voting power
The voting power of LandOcean and its Associates in the Company
may change as follows:
(i) Increase in voting power:
A. Transaction of Shares by LandOcean or its Associates on and
off market. LandOcean and its Associates could increase its
Shareholding under item 9 of section 611 of the Corporations Act
allowing it to acquire 3% every 6 months.
B. Cancellation of Shares held by Shareholders other than LandOcean and its Associates.
(ii) Decrease in voting power:
A. Disposal of Shares held by LandOcean or its Associates.
B. Issue of Shares by the Company to Shareholders other than LandOcean and its Associates.
C. Conversion of a proportion of Convertible Notes rather than
all of the Convertible Notes.
D. Exercise of Options by Option holders.
The Corporations Act and ASIC Regulatory Guide 74 set out a
number of regulatory requirements which must be satisfied. These
are summarised below.
1.7 Conversion variables
Shareholders should note that given the variables required to
determine the Accrued Interest (converted into Australian dollars)
and the Subscription Price pursuant to the Subscription Agreement,
and the Conversion Price (converted into US dollars) pursuant to
the Convertible Note Agreement, it is not possible to provide an
exact number of Shares to be issued, or the total increase in the
relevant interest of LandOcean (or its Associates), under the
Subscription Agreement or on conversion of the Convertible
Notes.
The Accrued Interest will be subject to the AUD/USD exchange on
the Completion Date and the Subscription Price will be based on the
average of the daily volume weighted average sale price of Shares
traded on the ASX during the 90 Trading Days prior to the
Completion Date. Further, the Conversion Price under the
Convertible Note Agreement will be subject to the GBP/USD exchange
rate at the time of conversion. The Company does not expect this
will have a material effect on the number of Shares to be issued to
LandOcean under the Subscription Agreement and on conversion of the
Convertible Notes.
For details of other scenarios possible as a result of an
alternate Subscription Price or Conversion Price after applicable
foreign currency conversion and the effect this would have on the
capital structure of the Company refer to Schedule 2.
1.8 Relevant interest may not be obtained
Although the Accrued Interest will convert in full on the day of
Shareholder approval of Resolution 1, Shareholders should note that
the Convertible Notes may be redeemed in full or in part at the
election of LandOcean (subject to the minimum conversion
threshold). That is, they may not all be converted. The material
terms and conditions of the Convertible Notes, including the terms
that govern redemption, repayment and conversion, are set out in
Schedule 1.
Redemption of the Convertible Notes (rather than conversion)
would result in LandOcean or its Associates being repaid the
relevant amount in cash rather than Shares. The effect of this
would be that LandOcean or its Associates may acquire less Shares
(and a smaller relevant interest) than the approval Resolution 1
permits.
1.9 Item 7 of section 611 of the Corporations Act
(a) Section 606 of the Corporations Act prohibits a person
acquiring a relevant interest in the issued voting shares of the
Company if, because of the transaction, that person's or another
person's voting power in the Company increases from:
(i) 20% or below to more than 20%; or
(ii) a starting point that is above 20% and below 90%.
(b) The voting power of a person in the Company is determined by
reference to section 610 of the Corporations Act. A person's voting
power in the Company is the total of the votes attaching to the
Shares in the Company in which that person and that person's
associates (within the meaning of the Corporations Act) have a
relevant interest.
(c) Under section 608 of the Corporations Act, a person will
have a relevant interest in Shares if:
(i) the person is the registered holder of the Shares;
(ii) the person has the power to exercise or control the
exercise of votes or disposal of the Shares; or
(iii) the person has over 20% of the voting power in a company
that has a relevant interest in Shares, then the person has a
relevant interest in said Shares.
(d) For the purpose of determining who is an associate you need
to consider section 12 of the Corporations Act. Any reference in
chapters 6 to 6C of the Corporations Act to an associate is as that
term is defined in section 12 of the Corporations Act. The
definition of 'associate' in section 12 of the Corporations Act is
exclusive. If a person is an associate under section 11, 13 or 15
of the Corporations Act then it does not apply to chapters 6 to 6C
of the Corporations Act. A person is only an associate for the
purpose of chapters 6 to 6C of the Corporations Act if he is an
associate under section 12 of the Corporations Act.
(e) A person (second person) will be an associate of the other
person (first person) if:
(i) the first person is a body corporate and the second person is:
A. A body corporate the first person controls;
B. A body corporate that controls the first person: or
C. A body corporate that is controlled by an entity that
controls the first person;
(ii) the second person has entered, or proposes to enter, into a
relevant agreement with the first person for the purpose of
controlling or influencing the composition of the board of a body
corporate or the conduct of the affairs of a body corporate; or
(iii) the second person is a person with whom the first person
is acting, or proposes to act, in concert in relation to the
affairs of a body corporate.
(f) The Corporations Act defines 'control' and 'relevant
agreement' very broadly as follows:
(i) Under section 50AA of the Corporations Act control means the
capacity to determine the outcome of decisions about the financial
and operating policies of the Company. In determining the capacity
you need to take into account the practical influence a person can
exert and any practice or pattern of behaviour affecting the
financial or operating policies of the Company.
(ii) Under section 9 of the Corporations Act relevant agreement
means an agreement, arrangement or understanding:
(iii) whether formal or informal or partly formal and partly informal;
A. whether written or oral or partly written and partly oral; and
B. whether or not having legal or equitable force and whether or
not based on legal or equitable rights.
(g) Associates are determined as a matter of fact. For example,
where a person controls or influences the Board or the conduct of
the Company's business affairs or acts in concert with a person in
relation to the entity's business affairs.
(h) Section 611 of the Corporations Act has exceptions to the
prohibition in section 606 of the Corporations Act (Prohibition).
Item 7 of section 611 of the Corporations Act provides a mechanism
by which Shareholders may approve an issue of Shares to a person
which results in that person's or another person's voting power in
the Company increasing from:
(i) 20% or below to more than 20%; or
(ii) a starting point that is above 20% and below 90%.
1.10 Reason approval under item 7 of section 611 of the Corporations Act is required
As set out above, item 7 of section 611 of the Corporations Act
provides an exception to the Prohibition, whereby a person may
acquire a relevant interest in a company's voting shares with
shareholder approval.
Resolution 1 seeks Shareholder approval, for the purpose of item
7 of section 611 of the Corporations Act, to allow the Company to
issue Shares to LandOcean in accordance with the Subscription
Agreement and the acquisition by LandOcean and its Associates of a
relevant interest in the issued voting shares of the Company
resulting from the issue of Shares in accordance with the
Subscription Agreement and on the conversion of Convertible Notes
held by LandOcean, which is otherwise prohibited by section 606(1)
of the Corporations Act, which may result in LandOcean's and its
Associates voting power in the Company increasing to a maximum of
32.6%. Refer to Schedule 2 for further details of the voting power
calculations including variables and assumptions used.
1.11 Specific Information required by item 7 of section 611 of
the Corporations Act and ASIC Regulatory Guide 74
The following information is required to be provided to
Shareholders under the Corporations Act and ASIC Regulatory Guide
74 in respect of obtaining approval for item 7 of section 611 of
the Corporations Act. Shareholders are also referred to the
Independent Expert's Report prepared by Moore Stephens Perth
Corporate Services Pty Ltd annexed to this Explanatory
Statement.
(a) The identity of LandOcean, its Associates and any person who
will have a relevant interest in the Shares to be allotted to
LandOcean or its Associates
Details of LandOcean are set out in Section 1.3.
(b) Full particulars (including the number and percentage) of
the shares in the Company to which LandOcean and its Associates
will be entitled immediately before and after Resolution 1
LandOcean, nor any of its Associates, will not hold any Shares
in the Company prior to issue of Shares under the Subscription
Agreement or on conversion of the Convertible Notes.
Refer to Schedule 2 for full particulars (including the number
and percentage) of Shares in which LandOcean has, or will have, a
relevant interest in immediately before and after the issue of
Shares to LandOcean under the Subscription Agreement, as well after
conversion of the Convertible Notes (assuming all of the
Convertible Notes are converted into Shares).
(c) The identity, associations (with the Company, LandOcean or
any of their Associates) and qualifications of any person who is
intended to become a director if Shareholders agree to Resolution
1
Subject to the thresholds set out in Section 1.4(b), LandOcean
may nominate up to two persons to be appointed as non-executive
directors of the Company.
At the date of this Notice, LandOcean has advised the Company
that it does not wish to appoint nominee directors, but may
exercise this right in the future. The election or re-election of
these nominee directors (as relevant) will be subject to the
provisions of the Company's Constitution and other applicable
law.
(d) LandOcean's intentions regarding the future of the Company
if Shareholders agree to the transaction and the allotment of
Shares to LandOcean and/or its Associates
Other than as disclosed elsewhere in this Explanatory Statement,
the Company understands that LandOcean and its Associates:
(i) have no present intention to change the business of the Company;
(ii) have no present intention to inject further capital into
the Company (other than as disclosed in this Notice);
(iii) have no present intention to change the future employment
of the present employees of the Company;
(iv) have no proposal whereby any property will be transferred
between the Company and LandOcean or and its Associates; and
(v) have no present intention to redeploy any fixed assets of the Company.
These intentions are based on information concerning the
Company, its business, and the business environment which is known
to LandOcean and its Associates at the date of this Notice.
These present intentions may change as new information becomes
available, as circumstances change or in the light of all material
information, facts and circumstances necessary to assess the
operational, commercial, taxation and financial implications of
those decisions at the relevant time.
(e) Particulars of the terms of the proposed allotment of Shares
and any contract or proposed contract between LandOcean and the
Company or any of their Associates which is conditional upon, or
directly or indirectly dependent on, Shareholders agreement to the
allotment of Shares to LandOcean and its Associates pursuant to
Resolution 1
The terms of the Subscription Agreement and Convertible Note
Agreement governing the issue of Shares are summarised in Sections
1.4, 1.5 and Schedule 1 (as applicable).
Other than the Subscription Agreement, the Convertible Note
Agreement and the IMSC Amending Deed, there are no contracts or
proposed contracts between LandOcean and the Company or any of
their Associates which are conditional upon, or directly or
indirectly dependent on, Shareholder agreement to the issue of the
Shares pursuant to Resolution 1.
(f) When the allotment of Shares under the Subscription is to be made
The Shares to be issued to LandOcean under the Subscription
Agreement will be issued on the Completion Date.
The Convertible Notes have been issued to LandOcean pursuant to
the Convertible Note Agreement. The right of LandOcean to convert
the Convertible Notes into Shares is subject to approval by
Shareholders. The conversion into Shares could happen at any time
following approval by Shareholders until the Maturity Date of the
Convertible Notes.
(g) An explanation of the reasons for the proposed allotment of
Shares and to LandOcean and its Associates
The issue of Shares to LandOcean under the Subscription
Agreement will be in full and final satisfaction of the Company's
obligation to pay the Accrued Interest to LandOcean under the
Convertible Note Agreement.
The Convertible Notes were issued to LandOcean pursuant to the
terms of the Convertible Note Agreement, and as consideration for
LandOcean agreeing to waive its entitlement to US$20,000,000 of the
Accrued Fees in accordance with the IMSC Amending Deed.
(h) The interests of the Directors in Resolution 1
None of the Directors have an interest in Resolution 1.
(i) Identity of the Directors who approved or voted against the
proposal to put Resolution 1 to Shareholders and the Explanatory
Statement
All of the Directors voted in favour of the proposal to put the
issue of Shares the subject of Resolution 1 the approval of
Shareholders.
(j) Any intention of LandOcean to change significantly the
financial or dividend policies of the Company
LandOcean does not intend to change significantly the financial
or dividend policies of the Company at this time.
(k) Recommendation or otherwise of each Director as to whether
Shareholders should agree to the proposed allotment and the reasons
for the recommendation or otherwise
See Section 1.15.
(l) An analysis of whether the proposed allotment of Shares
pursuant to Resolution 1 is fair and reasonable when considered in
the context of the interests of the Shareholders other than
LandOcean and its Associates.
See Section 1.14.
1.12 Advantages
The Directors are of the view that the following non-exhaustive
list of advantages may be relevant to a Shareholder's decision on
how to vote in relation to Resolution 1:
(a) it will allow the Company to preserve cash to be spent on
its existing assets rather than interest payments to LandOcean.
1.13 Disadvantages
The Directors are of the view that the following non-exhaustive
list of disadvantages may be relevant to a Shareholder's decision
on how to vote in relation to Resolution 1:
(a) Shareholders will have their voting power reduced.
Consequently, the ability of existing Shareholders to influence
decisions, including the composition of the Board or the
acquisition or disposal of assets will be reduced accordingly;
(b) LandOcean and its Associates will hold up to 20.9% of Range
following the issue of Shares under the Subscription Agreement
increasing to up to 32.6% on conversion of all Convertible Notes
(subject to the assumptions set out in Schedule 2). Therefore,
LandOcean and its Associates will be able to have a significant
influence over ordinary resolutions. In addition, LandOcean may
have the ability to nominate up to two persons to be nominated as
non-executive directors of the Company; and
(c) the number of Shares to be issued to LandOcean is subject to
exchange rate fluctuations and not known and therefore the level of
potential dilution to Shareholders can only be approximated.
1.14 Independent Expert's Report
The Independent Expert's Report comments on the fairness and
reasonableness of the transaction the subject of this Resolution to
the non-associated Shareholders in the Company.
The Independent Expert's Report also contains an assessment of
the advantages and disadvantages of the proposed issue of Shares to
LandOcean. This assessment is designed to assist all Shareholders
in reaching their voting decision.
The Independent Expert has provided the Independent Expert's
Report and has provided an opinion that it believes the proposal as
outlined in Resolution 1 is FAIR AND REASONABLE to the Shareholders
not associated with LandOcean. It is recommended that all
Shareholders read the Independent Expert's Report in full.
The Independent Expert's Report is enclosed with this Notice of
Meeting at Annexure 1.
1.15 Interests and Recommendations of Directors
None of the current Board members have a material personal
interest in the outcome of Resolution 1 other than their interests
arising solely in their capacity as Shareholders of the Company.
Each of the Directors who holds Shares in the Company (or whose
associated entities hold Shares) and is entitled to vote will vote
their Shares in favour of Resolution 1.
All of the Directors are of the opinion that Resolution 1 is in
the best interests of Shareholders and, accordingly, the Directors
unanimously recommend that Shareholders vote in favour of
Resolution.
The Director's recommendations are based on an assessment of the
advantages and disadvantages referred to in Sections 1.12 and 1.13
respectively and being of the view that the advantages outweigh the
disadvantages and the Independent Expert has determined the issue
of Shares contemplated by Resolution 1 is FAIR AND REASONABLE to
the non-associated Shareholders.
The Directors are not aware of any other information other than
as set out in this Notice of Meeting that would be reasonably
required by Shareholders to allow them to make a decision whether
it is in the best interests of the Company to pass Resolution
1.
Glossary
GBP means the official currency of the United Kingdom.
A$ means Australian dollars.
AIM means the market of that name operated by the London Stock
Exchange.
AIM Rules means the AIM Rules for Companies published by the
London Stock Exchange, as amended from time to time.
ASIC means the Australian Securities & Investments
Commission.
Associate has the meaning in Section 1.9 and as otherwise
defined in the Corporations Act.
ASX means ASX Limited (ACN 008 624 691) or the financial market
operated by ASX Limited, as the context requires.
ASX Listing Rules means the Listing Rules of ASX.
Board means the current board of directors of the Company.
Business Day means Monday to Friday inclusive, except New Year's
Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any
other day that ASX declares is not a business day.
Chair means the chair of the Meeting.
Company means Range Resources Limited (002 522 009).
Constitution means the Company's constitution.
Convertible Note means a convertible note with the terms and
conditions set out in Section 1.4(a) and Schedule 1.
Corporations Act means the Corporations Act 2001 (Cth).
Directors means the current directors of the Company.
DI Holder means a holder of depositary interests representing
Shares which are electronically listed for trading on AIM and
issued by Computershare Investor Services plc which holds legal
title to the underlying Shares.
Explanatory Statement means the explanatory statement
accompanying the Notice.
General Meeting or Meeting means the meeting convened by the
Notice.
GMT means Greenwich Mean Time.
Notice or Notice of Meeting means this notice of meeting
including the Explanatory Statement and the Proxy Form.
Option means an option to acquire a Share.
Proxy Form means the proxy form accompanying the Notice.
Resolution means the resolution set out in the Notice.
Section means a section of the Explanatory Statement.
Share means a fully paid ordinary share in the capital of the
Company.
Shareholder means a registered holder of a Share.
Trading Day means a day determined by ASX to be a trading day in
accordance with the Listing Rules.
US$ means United States dollars.
VWAP means volume weighted average price.
WST means Western Standard Time as observed in Perth, Western
Australia.
Schedule 1 - Terms and conditions of the Convertible Notes
The terms and conditions of the Convertible Notes are as
follows:
Terms Details
Subscription Amount US$20,000,000
-----------------------------------------------------
Face Value US$1.00 per Convertible Note
-----------------------------------------------------
Maturity Date 28 November 2019
-----------------------------------------------------
Interest Rate 8% per annum
Default interest on any amount that is not paid
when due will be at a rate of 10% per annum.
-----------------------------------------------------
Interest Interest will accrue daily and be payable annually
in arrears.
-----------------------------------------------------
Conversion Price GBP0.0088.
To calculate the Conversion Price in US Dollars,
the exchange rate will be the mid-rate which
appears on the Bloomberg Screen on that date.
-----------------------------------------------------
Conversion by LandOcean Subject to converting the Minimum Conversion
Amount, LandOcean may convert some or all of
the Convertible Notes into Shares at the Conversion
Price.
-----------------------------------------------------
Redemption by the At any time after the issue date, the Company
Company may elect to redeem all or some of the Convertible
Notes by payment of the amount outstanding in
cash.
-----------------------------------------------------
Redemption on Maturity On the Maturity Date, the Company must redeem
Date all of the outstanding Convertible Notes (being
those which have not been previously redeemed
or converted) by payment of the amount outstanding
in cash.
-----------------------------------------------------
Redemption by LandOcean The Convertible Notes are subject to the following
redemption events: (i) non-payment of funds
within 40 business days of the due date, (ii)
the winding up or insolvency of the Company
or the Company (or one of its subsidiaries),
or (iii) ceasing or threatening to cease to
carry on its business which is likely to adversely
affect the Company as a whole.
LandOcean may require the Company to redeem
some or all of the Convertible Notes following
the occurrence of any of these events.
-----------------------------------------------------
No Voting Rights The Convertible Notes do not carry any voting
rights but LandOcean will have the same rights
as a holder of Shares to receive notices of
general meetings, reports, financial statements
or any other communications issued by the Company.
-----------------------------------------------------
Adjustment Event If there is any reconstruction of the issued
share capital of the Company before conversion
of the Convertible Notes, the rights of LandOcean
may be varied to comply with the Listing Rules
which apply to the reconstruction at the time
of the reconstruction.
-----------------------------------------------------
Security Nil
-----------------------------------------------------
Governing Law Western Australia
-----------------------------------------------------
Schedule 2 - Effect on capital structure and voting power of
LandOcean and Associates
Shareholders should note that given the variables required to
determine the Accrued Interest (converted into Australian dollars)
and the Subscription Price pursuant to the Subscription Agreement,
and the Conversion Price (converted into US dollars) pursuant to
the Convertible Note Agreement, it is not possible to provide an
exact number of Shares to be issued, or the total increase in the
relevant interest of LandOcean (or its Associates), under the
Subscription Agreement or on conversion of the Convertible
Notes.
The Accrued Interest will be subject to the AUD/USD exchange on
the Completion Date and the Subscription Price will be based on the
average of the daily volume weighted average sale price of Shares
traded on the ASX during the 90 Trading Days prior to the
Completion Date. Further, the Conversion Price under the
Convertible Note Agreement will be subject to the GBP/USD exchange
rate at the time of conversion. The Company does not expect this
will have a material effect on the number of Shares to be issued to
LandOcean under the Subscription Agreement and on conversion of the
Convertible Notes.
The table below is a worked example of the number of Shares that
may be issued on conversion of the Convertible Notes based on
various exchange rates at the time of issue.
Scenario 1 Scenario 2
Exchange rate GBP = US$1.216 GBP = US$1.3012
(at 27 October 2016) (as at 24 January 2019)
---------------------- -------------------------
Conversion Price (in US$0.0107 US$0.0115
US$)
---------------------- -------------------------
Shares issued on conversion
of the Convertible Notes 1,869,172,854 1,746,639,466
---------------------- -------------------------
The table below is a worked example of the number of Shares that
may be issued to LandOcean under the Subscription Agreement
(assuming a Subscription Price of A$0.001 under Scenario 1 and
A$0.0013 under Scenario 2) at the Completion Date.
Scenario 1 Scenario 2
Exchange rate A$ = US$0.7136 A$ = US$0.7136
(at 24 January 2019) (at 24 January 2019)
---------------------- ----------------------
Accrued Interest (in A$2,242,058 A$2,242,058
A$)
---------------------- ----------------------
Subscription Price A$0.001 A$0.0013
---------------------- ----------------------
Shares issued in satisfaction
of Accrued Interest 2,242,058,209 1,724,660,161
---------------------- ----------------------
Note: The last trading price of the Shares on ASX as at 24
January 2019 was A$0.001. As Shares cannot trade on ASX at a lower
price the Subscription Price cannot be lower than A$0.001. If the
Subscription Price is higher than A$0.001 then the maximum number
of Shares to be issued under the Subscription Agreement (and in
turn Resolution 1) will be less and, accordingly, the voting power
of LandOcean and its Associates will also be less.
The proposed capital structure of the Company on completion of
the issue of Shares under the Subscription Agreement and upon
conversion of the Convertible Notes is set out below.
Scenario 1 Scenario 2
Total Shares on issue
at the date of this Notice 8,504,921,692 8,504,921,692
--------------- ---------------
Increase in the number
of Shares on issue following
issue of Shares in satisfaction
of Accrued Interest 2,242,058,209 1,724,660,161
--------------- ---------------
Total Shares 10,746,979,901 10,229,581,853
--------------- ---------------
Percentage of share capital
held by LandOcean or
its Associates 20.9% 16.9%
--------------- ---------------
Increase in the number
of Shares on issue following
issue of Shares on conversion
of the Convertible Notes 1,869,172,854 1,746,639,466
--------------- ---------------
Total Shares 12,616,152,755 11,976,221,319
--------------- ---------------
Percentage of share capital
held by LandOcean or
its Associates 32.6% 29.0%
--------------- ---------------
The table above uses the following assumptions:
1. All of the Convertible Notes are converted to Shares on or before the Maturity Date
2. The Company does not issue any additional Shares and no
Options expire, or are exercised, prior to the date that all of the
Convertible Notes have converted.
3. LandOcean and its Associates do not acquire a relevant
interest in any other Shares other than under Resolution 1.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCFFLFXKFFXBBQ
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