Minrex Resources has agreed to a reverse takeover by private firm Skin Elements, a sunscreen and cosmetics company steered by former New Tel head Peter Malone and corporate advisor Luke Martino.
Mr Malone made headlines more than a decade ago when he was chief executive of the failed telco New Tel, which went into administration in 2002.
Amid the controversy, Dominic Martino also stepped down as chief executive of Deloitte.
The two brothers now run Indian Ocean Group – a corporate advisory firm in Subiaco, which also has an office in Sydney.
Under the deal announced today, Minrex, a former gold and tin explorer, said it had agreed to issue 46.2 million shares, valued at $7.4 million, to Skin shareholders and assume $1 million in liabilities held by the latter.
Under the dea, Skin shareholders will gain a 71 per cent stake in the ASX-listed Minrex.
In addition, Skin shareholders will be issued 25 million three-year call options in Minrex, exercisable at 20 cents.
Mr Malone told Business News that, he, along with Skin founding partners Leo Fung and Craig Piercy, own about 50 per cent of the skincare company while about another three dozen shareholders hold the balance of the company.
As part of the deal, a minimum capital raising of $1.5 million will be required, with Skin’s creditors already agreeing to provide $800,000 as part of the raising.
Proceeds from the capital raising will be used for the development and expansion of the company’s natural skincare products, which include the Soleo Organics sunscreen and Elizabeth Jane cosmetics brands, as well as for general working capital purposes.
The Soleo Organics sunscreen is available in various health stores across Australia, and Mr Malone said the company was aiming to roll-out the product to pharmacies before approaching large supermarket chains such as Coles and Woolworths.
Upon completion of the deal, Minrex will change its name to Skin Elements, and Mr Malone will be appointed executive chairman.
Mr Malone said Skin decided to complete the backdoor listing now after Minrex approached the company for a reverse takeover.
“We have now released (our products) into test market phase in the last few years and we have been getting very strong results, and we’ve decided now that there is a global opportunity in front of us and we need access to working capital,” he said.
Mr Durack said the board believed Skin’s range of all natural products compared to conventional synthetic products would allow the company to become a relevant player in skincare market.
“The acquisition of Skin offers great potential to deliver significant shareholder value from greater international market penetration and new product development,” he said.
Minrex expects the transaction to be completed, provided all requirements are met, in early August before relisting as the combined entity on August 10.