JOHANNESBURG (miningweekly.com) – Cash-strapped diversified miner ASA Resource Group has suspended the trading of its ordinary shares on the Alternative Investment Market, with effect from 11:00 on Friday morning.
The Africa-focused miner attributed its cash constraints to currency restrictions imposed by the Reserve Bank of Zimbabwe, which have worsened since the company announced in April that, following internal investigations, significant funds had been remitted from operating subsidiaries in Zimbabwe that were not properly accounted for.
As a result, ASA has not been able to receive adequate funding from its operating subsidiaries and is, therefore, struggling to meet its ongoing liabilities.
“The company has outstanding creditors relating to legacy litigation, normal corporate expenses, consultants’ fees and unpaid directors' fees and salaries. The board has been pursuing a number of refinancing options, but has not been able to finalise anything as yet, and the company’s cash flow remains a serious concern,” noted ASA.
The company explained that funds remitted to group entities in Hong Kong, under the direction of Yat Hoi Ning and Yim Kwan – prior to the pair being removed as directors – have not been accounted for.
“In light of the above circumstances, ASA's ordinary shares have been suspended from trading on AIM,” noted the company, adding that the board was consulting insolvency practitioners to better understand the obligations and duties of the company directors and to decide on an appropriate course of action.
Meanwhile, the ASA board confirmed that it had received an offer document from investment company Rich Pro Investments (RPI) to acquire ASA at 2.1p per ordinary share in cash.
The board said it had engaged with RPI with the intention to provide shareholders with a recommendation in respect of the offer.
“Unfortunately, the board did not receive the level of assurances it was seeking regarding the areas of concern which it raised with RPI,” concluded ASA.