CityView terminates underwriting deal

Perth-based CityView Corporation has terminated an underwriting deal for a $6 million capital raising after learning its underwriter was not appropriately licenced.

The oil and gas company said underwriter Pinnacle Capital Management had previously made representations that it was licenced when the non-renounceable rights issue was first made public early last month.

Under the raising, one new share will be issued for every existing share hold, with up to 498 million fully paid shares to be distributed to raise up to $6.2 million.

CityView said it will continue with the raising, however will issue any shortfall of shares at its discretion in accordance with ASX rules.

Shares in CityView were unchanged at one cent at 10:43 AEDT.

The announcement is pasted below:

The Company wishes to advise that it has decided to terminate the underwriting arrangements with Pinnacle Capital Management Limited (Pinnacle) in relation to the Company's pro rata non-renounceable entitlements issue which was announced on 7 November 2008 (Entitlements Issue).

The decision to terminate the underwriting arrangement was made by the Board after it became aware that Pinnacle was not appropriately licensed to conduct the underwriting in accordance with the Corporations Act 2001 (Cth), despite warranties and representations being made by Pinnacle to the contrary under the underwriting agreement.

CityView was not aware of Pinnacle's failure to be licensed before the offer document was despatched to shareholders on 21 November 2008 (Offer Document). In accordance with section 1.1 of the Offer Document, where the Underwriting Agreement is terminated for any reason prior to completion of the Entitlements Issue, the Company will issue any shortfall from the Entitlements Issue at the Directors discretion.

The Company will issue any shortfall shares from the Entitlements Issue within 3 months after the Closing Date for the Entitlements Issue, being 5 December 2008, in accordance with ASX Listing Rule 7.2.

The Entitlements Issue will not be affected in any other way by the termination of the underwriting arrangement.