The multi-million dollar fortunes of Paladin Energy Ltd chairman Rick Crabb and company secretary Gillian Swaby are at risk after the company disclosed that about half their shares are subject to margin loans with failed lender Lift Capital.
The multi-million dollar fortunes of Paladin Energy Ltd chairman Rick Crabb and company secretary Gillian Swaby are at risk after the company disclosed that about half their shares are subject to margin loans with failed lender Lift Capital.
Mr Crabb has 6.38 million Paladin shares worth $27.4 million tied up in the Lift collapse, out of a total holding of 12 million shares.
Ms Swaby has an even bigger exposure - seven million Paladin shares worth $30.1 million are caught up in the Lift collapse, out of a total holding of 10.2 million shares.
In addition, Ms Swaby has used 15 million shares in Deep Yellow Ltd, worth $3.3 million, to secure a margin lending facility. Those shares are out of a total holding of 39.9 million Deep Yellow shares.
Paladin said today it believes a surge in the trading of its shares may be due to speculation surrounding Lift Capital being put into administration.
McGrathNicol was appointed as administrator of Lift Capital on Thursday, forcing financial backer Merrill Lynch to appropriate shares held by Lift, including Paladin shares.
Mr Crabb and Ms Swaby launched legal action against Merrill Lynch and Lift on Friday, seeking to prevent Merrill Lynch from liquidating the shares.
A hearing of the matter in the Federal Court in Perth today was held over until Wednesday.
"On Friday, trading volumes in Paladin stock both on the ASX (Australian stock exchange) and TSX (Toronto Stock Exchange) were abnormally high and we believe this development may possibly be due to speculation surrounding Lift Capital Partners Pty Ltd being put into administration," Paladin said in a statement today.
Paladin's shares closed down 4.76 per cent at $4.60 on Friday on a volume of 5.9 million shares.
On average, Paladin's shares were trading on a volume of about three million shares per day in the four days before then.
At 1154 AEDT, the shares were down 21 cents, or 4.57 per cent, at $4.39.
"The directors of Paladin wish to inform and remind the investment community that the company is in a strong position and can be regarded as the leading emerging uranium producer in the world," Paladin said.
The company said its flagship Langer Heinrich uranium project in Namibia is maintaining its production guidance for the calendar years, 2008 and 2009.
"Lift has gone into administration," Ms Swaby said.
"Myself and Mr Crabb have margin lending facilities and we want to clearly secure our shareholdings.
"We fully believe with all legal documentation we have beneficial title to them and we started taking legal action on Friday.
"We had already lodged documentation several days ago to settle the position and that wasn't processed."
Paladin said it has commenced an aggressive expansion program at the Langer Heinrich project while construction at its Kayelekera uranium project in Malawi is on track and on budget for completion at the end of 2008.
"These activities are fully funded with bank finance and its existing cash funds," the company said.
Paladin said $US325 million ($A352.4 million) raised in February placed it in a position to maintain ongoing merger and acquisition activities over the next 12 to 18 months.
It estimated that its production of uranium oxide in 2008 would total 2.6 million pounds, growing to 4.7 million pounds in 2009.
By 2012/14, it said, it expected either its Mt Isa uranium project in Queensland or its Angela uranium project in the Northern Territory "to be on a development path, potentially adding further production and importantly establishing Australia as another cornerstone in its production portfolio".
