Lithex, Mpire deal falls through

Lithex Resources has scrapped its planned purchase of internet marketing business Mpire Media, which was the second business Perth entrepreneur Zhenya Tsvetnenko was seeking to list on the stock market.

Lithex, which announced the Mpire deal in July last year, did not specify why the purchase was scrapped but stated last month that the Mpire vendors were seeking to revise the deal.

The company said it was evaluating other investment opportunities that have been presented to it in recent months.

It said a $1.2 million loan that Lithex advanced to Mpire’s parent company Livelynk Group is due for repayment at the end of March.

In addition, Lithex said it would be reimbursed half the costs incurred in relation to the planned purchase, amounting to $165,000.

As a result, it expects to have $1.65 million cash by early April.

The cancellation comes despite Lithex signing up Shaw Stockbroking last October as lead manager for a $10 million capital raising.

Mpire was founded in 2007 by Mr Tsvetnenko, who also runs bitcoin company Digital CC, which completed a backdoor listing on the ASX last year.

The Digital CC and Mpire deals are among 25 Western Australia-related backdoor listings to have been announced over the past year, as moribund mining and exploration companies have sought a new lease of life by acquiring new businesses.

A detailed analysis of this trend will be in the 2014 corporate finance review, in next week’s print edition of Business News.