TNG delays spin-off
PERTH (miningweekly.com) – ASX-listed TNG will delay its base metal asset demerger, amid the current weak market conditions in the junior exploration sector.
TNG in April announced plans to spin off its noncore portfolio of zinc, copper and other base metals assets in the Northern Territory into an entity called Todd River Resources.
Under the demerger, TNG would have emerged with a 20% cornerstone stake in the new company, while TNG shareholders would hold 80% of the company through an in-specie distribution.
TNG’s shareholders approved the demerger in May and the in-specie distribution had been earmarked for no later than November 20.
However, TNG told shareholders on Monday that, since the May general meeting, the company had been exploring the optimum funding structure for Todd River, including funding for an unlisted structure and the potential for a listing on the ASX.
Given the current level of investor appetite for exploration companies, the TNG board took the decision to defer the spin-out until market conditions improved.
“The directors believe that greater value can be created for shareholders by retaining the assets within TNG at present and considering the spin-out when market conditions improve, when it will be in a stronger position to capture the benefits originally identified in the demerger proposal,” said MD Paul Burton.
He noted that any future spin-out proposal involving a capital reduction and in-specie distribution would be subject to further shareholder approval.
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