14/03/2014 - 15:34

Jacka eyes capital raising

14/03/2014 - 15:34

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Cash strapped Jacka Resources has appointed two broking firms to assess capital raising options after confirming that a friendly takeover offer from Tangiers Petroleum looks set to fail.

Jacka eyes capital raising

Cash strapped Jacka Resources has appointed two broking firms to assess capital raising options after confirming that a friendly takeover offer from Tangiers Petroleum looks set to fail.

Tangiers announced the takeover bid in December, however two months later the company’s executive chairman Eve Howell and non-executive director Max de Vietri resigned, citing a loss of support of several major shareholders.

The resignations cast doubt over the deal and at the time Jacka recommended its shareholders take no action until further information became available.

Tangiers, which has operations in Morocco and Australia, also refused to allow Jacka to draw down any further funds from a loan facility it had provided as part of the takeover. The loan facility was granted to allow Jacka to repay about $1.7 million owing to existing lenders.

Jacka said today that it “appears likely” the takeover offer would close unsuccessfully on Tuesday, March 18, and that it had appointed Patersons Securities and DJ Carmichaels to assess “potential capital raising proposals”.

The company said any proceeds of a raising would be used to pay down debt and for on-going working capital purposes.

“Jacka has now reached agreement with the company’s existing lenders to extend the due date for repayment of amounts owing under these facilities, so as to allow the company more time to put in place alternative financing arrangements,” Jacka said.

The company also noted that it would need to repay $300,000 it had drawn down from the Tangiers facility within 90 days of completing a raising.

Jacka shares will remain in a trading halt until financing arrangements are in place.

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