11/01/2017 - 13:38

ASX queries Padbury's $106m raising plans

11/01/2017 - 13:38

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Padbury Mining has again attracted regulatory attention, with the company acknowledging it should have notified the ASX when it negotiated potential capital raisings worth $106 million with a Hong Kong-based investor last year.

ASX queries Padbury's $106m raising plans

Padbury Mining has again attracted regulatory attention, with the company acknowledging it should have notified the ASX when it negotiated potential capital raisings worth $106 million with a Hong Kong-based investor last year.

The ASX sent notice to Padbury last week asking the company to explain why statements in its annual report, released December 19, mentioned a proposed $2 million and $98 million placement to Hong Kong investment group Zhongying Property Development Company (ZYPD) but wasn’t disclosed to the Australian bourse when discussions were entered into in June.

In response, Padbury said it felt it would have been misleading the market by announcing the deal prior to it being completed.

“The strategic cooperation agreement was signed to provide a period of exclusivity for ZYPD, and for cultural purposes provide a framework for the parties to invest significant time and money in due diligence and negotiating binding documents regarding investments in the company and the advancement of the company’s assets,” Padbury said.

“Although the SCA contemplates placements of $2 million and $98 million in the company, it does not create any legally binding rights or obligations on the parties to proceed with these placements. The SCA expressly provides that any placements are to be subject to separate arrangements.”

Padbury also disclosed in the ‘events subsequent to reporting date’ section of its annual report that it had issued 476.1 million shares to various investors to raise $4.7 million “without disclosure using the company’s 15 per cent capacity under ASX Listing Rule 7.1 so that shareholder approval was not required”.

Of those shares, 77.7 million were issued to ZYPD.

It also hopes to raise a further $1.2 million from the investor, subject to shareholder approval.

“After obtaining legal advice, the company acknowledges that it ought to have disclosed the proposed issue of the shares immediately upon executing the proposed issue of shares immediately upon executing the subscription agreement on June 14,” the company said.

“In anticipation of confidentiality regarding the SCA being lost through this letter, the company confirms that it entered into the SCA with ZYPD, a company registered in Hong Kong, on 14 June 2016.”

It’s the latest rort for Padbury with two of its directors, Gary Stokes and Terence Quinn, each receiving fines of $25,000 and a ban from being company directors for three years after the Federal Court in August found their announcement of a $6 billion funding deal for the Oakajee port and rail project was misleading and deceptive.

Messrs Stokes and Quinn were the subject of an investigation by the Australian Securities and Investments Commission from June 2015 until they landed in the Federal Court.

They continue to be employed by Padbury, serving in advisory roles.

Padbury shares haven’t actively traded on the ASX since December 2014.

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