Consolidated Minerals has urged shareholders of OM Holdings to reject its proposed dual listing on the Hong Kong Stock Exchange, and has flagged major changes to the OM Holdings board.
ConsMin, which holds an 11.4 per cent stake in OM Holdings through a wholly-owned subsidiary, today outlined a series of concerns regarding OM's plans for dual listing.
ConsMin said it was primarily concerned that the proposed listing would result in "massive dilution" to the value of the existing stock, with the issue of 345 million new shares at up to a 20 per cent discount.
It said there was further risk of dilution with the possible release of an additional 220 million options.
Other concerns raised today by ConsMin included a lack of time and information to consider whether to approve the proposed listing and continued concerns regarding the transparency and corporate governance practises of OM Holdings.
OM Holdings released its plans for a dual listing on March 28. The deadline for proxies to be returned is April 18, giving shareholders less than three weeks to consider and approve the issue of the 345 million new shares.
ConsMin's largest shareholder, Gennady Bogolyubov, said: "ConsMin is not going to sit idly on the sidelines and watch the board of OMH massively dilute existing shareholders thorugh the company's largely unexplained plans to dual list in Hong Kong."
Mr Bogolyubov said major changes to the OM Holdings board would be the only solution to bring better governance and transparency to the company.
"Make no mistake, as we see it, OMH is run by the board and for the board and we are not going to watch minority shareholders be significantly disadvantaged yet again.
"We have had enough of the poor corporate governance and apparent lack of transparency and you can expect us to commence legal action against the HK listing, and then take steps to remove the current directors."
