PERTH (miningweekly.com) – ASX-listed ABM Resources on Friday told shareholders that the company was seeking legal advice after shareholder APAC Resources Capital turned to the Takeovers Panel to halt a transaction with Pacific Road.
Earlier in March, ABM Resources announced a three-for-five nonrenounceable rights issue at an issue price of 4c a share to raise a total of about A$8.2-million.
The rights issue was fully underwritten by Key Pacific Advisory Partners and fully sub-underwritten by Pacific Road Capital Management as trustee for Pacific Road Fund II Managed Investment Trust.
Pacific Road currently holds 19.85% of ABM Resources.
On the same day, ABM entered into a facility agreement with Pacific Road for a A$3.8-million facility in relation to environmental and general performance bonds currently provided by ANZ Bank.
The facility was to be implemented simultaneously with the rights issue, and was subject to a number of conditions, including ABM granting a security interest over its assets.
Also on March 9, ABM announced the resignation of one of its directors, and the intention of a further two to resign on the completion of the capital raise. Two new directors were appointed to the board, one the former interim CEO of ABM and the other a principal at Pacific Road.
In its application to the Takeovers Panel, APAC, which holds a 14.83% interest in ABM, said that the rights issue, underwriting and debt facility arrangements appeared to be an effort by Pacific Road to gain control of ABM without Pacific Road making a takeover offer.
APAC was seeking an interim order halting all the arrangements, or in the very least the rights issue, and was also seeking final orders that the rights issue not proceed until a shareholder meeting could be called for ABM shareholders, to consider a resolution by APAC to appoint two of its own nominees to the ABM board, and to remove the incumbent ABM directors.
A sitting panel had not been appointed as yet, and the Takeovers Panel had not made any decision on whether it would conduct proceedings.