PERTH (miningweekly.com) – India’s Gujarat NRE India has appealed to the Australian Takeovers Panel to halt an entitlement offer of ASX-listed Wollongong Coal, which was launched earlier this month.
At the start of November, Wollongong Coal announced its intention to raise up to A$66.68-million through an accelerated pro rata entitlement offer, offering eligible shareholders 19 fully paid ordinary shares for every 20 shares held, at an issue price of 1.8c each.
While Wollongong has raised A$135.92-million since November last year, under four rights issues, the company has maintained that its financial needs remained pressing while operations were suspended at its New South Wales mines.
The miner said at the time of the raising that the primary purpose of the new entitlement offer was to provide funds for the repayment of a drawdown facility provided by shareholder Jindal Group.
In fact, under the current takeover offer the potential existed for the Jindal Group to increase its shareholding in Wollongong from the current 74.39% to 84.99%, if no other shareholders take up their entitlements, and none of the shortfall shares were issued.
Wollongong further warned that compulsory acquisition would entitle the Jindal Group, subject to compliance with the Corporations Act, to acquire the remaining shares in Wollongong.
In its appeal to the Takeovers Panel, Gujarat, which owns a 6.94% shareholding in Wollongong, said that the entitlement offer was part of a strategy to deliver control of Wollongong to Jindal, without the shareholder paying a control premium, and that the structure and effect of the entitlement offer was not justified, given Wollongong’s financial circumstances.
Gujarat was seeking interim orders to prevent Jindal Group from acquiring or disposing of its Wollongong shares, or to increase its voting power in the ASX-listed junior.
Ultimately, Gujarat was hoping that the takeovers panel would cancel the entitlement offer, and that the Jindal Group would be restrained from proceeding with a compulsory acquisition.