East Africa to exit resources

East Africa Resources has become the 36th Perth-based company to announce a backdoor listing deal in the past 18 months, with plans to exit uranium exploration and acquire local security services business Threat Protect Australia.

Under the terms of a deal announced today, East Africa will wholly acquire Threat Protect in exchange for 165 million shares.

East Africa’s share price doubled today to 0.6 cents, which would value the acquisition at $990,000.

As East Africa will be adopting Threat Protect’s business, it will be required to complete a minimum $5 million capital raising at 20 cents a share, in order to comply with ASX re-listing rules.

Existing East Africa directors Peter Munachen and Henry David Kennedy have tendered their resignations from the board, while Demetrios Pynes, Paolo Ferrara and Derek La Ferla will join as managing director, executive director and chairman respectively.

Mr La Ferla is chairman of copper miner Sandfire Resources and mining services business OTOC, and is a partner of Lavan Legal.

He was previously a [artner at Norton Rose Fulbright and was as a director of listed investment company Katana Capital.

Aside from one nominated director, all other East Africa directors will resign from the company post-transaction.

East Africa will also conduct a small capital raising to fund transaction costs.

The company plans to be re-admitted on the ASX in July, under the new name Threat Protect Australia.

East Africa is one of 16 WA companies currently undertaking a backdoor listing - or reverse takeover - transaction, according to the BNiQ corporate finance database managed by Business News.

Since the beginning of last year, a further 16 WA companies have completed backdoor listings, while six transactions have been cancelled.

As Business News has reported, the increasing number of backdoor deals has attracted greater scrutiny by corporate regulators.

As a result, most of the deals have failed to meet their original schedule.

The spectacular share price gains achieved by Perth company Aziana is likely to lure more investors to these deals.

Aziana's share price has risen ten-fold to 31.5 cents over the past five weeks, since the junior explorer announced plans to acquire artifical intelligence business BrainChip.