Margaret River winemaker Palandri Ltd has announced plans to issue $6 million worth of shares to investors, including chief executive Darrel Jarvis, ahead of the company's listing on the ASX.
Margaret River winemaker Palandri Ltd has announced plans to issue $6 million worth of shares to investors, including chief executive Darrel Jarvis, ahead of the company's listing on the ASX.
In a debt-to-equity swap, Mr Jarvis will be awarded over 4 million shares, worth $1 million, to partially offset a secured loan of $1.9 million.
Once completed, the deal will give Mr Jarvis a 23.7 per cent holding in the company.
The company will place 15.4 million shares, worth $3.8 million, with Auckland-based Everlast International Investment Pty Ltd and a further 4.8 million shares, worth $1.2 million, with Detroit Equities Inc.
According to a company announcement, Palandri's placement with the two investors will enable it to develop foundation relationships in China, facilitating future exports.
On completion of the proposed transactions, Palandri will have over 79 million ordinary shares issued, currently trading on London'a Alternative Investment Market.
The full text of a company announcement is pasted below
The company is pleased to announce a private placement of ordinary shares to sophisticated investors at an issue price of 10p (ten pence) per share to raise a total of AUD $6 million (£ 2.4m).
The shares will be issued in Australia to the following parties:
The placement to parties 1 & 2 represents overseas investors with strategic interests in the China market place. This placement enables the company to develop foundation relationships in China to facilitate growth of wine sales to China. The Board is seeking admission of those 20,265,000 shares to trade on AIM immediately.
The placement to Darrel Jarvis will result from the conversion into ordinary shares of a secured loan to the value of $1 million held by Mr Jarvis. This transaction will remain subject to the approval of shareholders at a general meeting to be called in early 2007.
This transaction was undertaken as a sign of confidence by Mr Jarvis as a significant shareholder, and his commitment and support of the Company's future business direction.
As the conversion represents a related party transaction, the Board of Palandri Ltd will undertake to produce an independent expert's report to determine and confirm the fairness and reasonableness of the transaction prior to the resolution being presented at a general meeting for shareholder approval.
Following this conversion of the $1 million secured loan held by Mr Jarvis into ordinary shares, Mr Jarvis will hold 18,837,892 ordinary shares, representing 23.7 per cent. of the share capital, as enlarged by the private placement of new ordinary shares and the conversion of secured loan notes by Mr Jarvis.
The company will use the funds raised from the new third party shareholders (other than Darrel Jarvis) to provide additional working capital.
On completion of the proposed transactions Palandri will have 79,344,769 ordinary shares in issue.