01/02/2012 - 15:21

Murchison to downsize after Oakajee sale

01/02/2012 - 15:21

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Murchison Metals says it will distribute the majority of the $217 million in net proceeds from the sale of its stake in Crosslands Resources and the Oakajee Port & Rail development to investors and has signalled intentions to downsize the company in the wake of the sale.

The embattled resources junior said it was preparing for a general meeting of shareholders on February 13 to consider the proposed sale, for a total consideration of $325 million.

Murchison announced today that it was considering efficient mechanisms for the distribution of the majority of the sale proceeds, if the sale is approved by investors, but warned the process could take up to six months as the company seeks a ruling from the Australian Tax Office regarding the tax treatment of any distribution.

The company said it would use the intervening period to evaluate potential investment opportunities in the resources sector under the advice of financial services firm Rothschild.

Any acquisition would remain subject to shareholder approval, Murchison said.

Further, Murchison said it would downsize its executive team following completion of the transaction.

“It is proposed that the composition of the Murchison board will be reduced and restructured to better reflect the requirements of the company post-completion,” chairman Ken Scott McKenzie said in a letter to shareholders.

“I intend to continue in my role as non-executive chairman and Gred Martin will continue as the company’s managing director.

“The Murchison management team will also be downsized and restructured to consist of a small number of key personnel required to operate with the company.”

At close of trade today Murchison stocks were steady at 43.5 cents.

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