Welshpool-based pharmaceutical manufacturer PharmAust Ltd is seeking to finalise an urgent refinancing after shareholders rejected an $825,000 capital raising and moved to dump the company's current directors.
Welshpool-based pharmaceutical manufacturer PharmAust Ltd is seeking to finalise an urgent refinancing after shareholders rejected an $825,000 capital raising and moved to dump the company's current directors.
A shareholder has requisitioned a general meeting to vote on the removal of long-standing director Bryant McLarty and recently-appointed director Simon Owen.
The notice proposed the appointment of Peter Remta, Brian John and Owen Coote as directors of Pharmaust.
It was sent to Pharmaust on 22 August, one day before the company announced that Wembley Downs pharmacist Henry Gulev had agreed to join the board.
That followed the resignation from the board earlier this month of managing director Paul D'Sylva, who moved to the United States early this year, and non-executive director Wayne Best.
The notice was sent to Pharmaust two days after shareholders rejected the issue of 8.25 million shares at 10 cents each to CAMOFI Master LDC.
Shareholders voted 21.4 million against the proposal with 12.6 million in favour.
The company said after the shareholder meeting that it was considering a range of funding options, including a rights issue to raise up to $3.5 million.
Today's announcement is pasted below:
PharmAust Limited (ASX: PAA ) Working Capital and Re-Finance Facility
Following on from the defeat of the resolution at the EGM held on Monday 20 August 2007, the Company has an urgent requirement for working capital.
Additionally the Company's current credit facility with the National Australia Bank (NAB) expired on 31 July 2007 and was extended for a further month pending a review by NAB of the Company's ongoing financing capacity.
The Company has now negotiated and accepted a Facility which provides the Company with up to $300,000.00 of working capital on the following substantive terms:
- Satisfactory completion of due diligence by the lender in relation to the NAB's Facility and security documentation;
- The Company instigating a rights issue to repay the working capital and to fund the Company's ongoing operations as soon as practicable;
- Repayment of all working capital advanced, together with the repayment of all outstanding hire purchase liabilities secured under the NAB Facility, out of the proceeds of the rights issue and as soon as practicable thereafter; and
- At an interest rate of 10% until repayment.
The lender has conditionally agreed with NAB to take an assignment of the NAB's entire position with regard to the Company and to extend that Facility, subject to the re-payment of all outstanding hire purchase liabilities, for a further 12 months on the same terms and conditions as those existing with NAB. This refinancing is subject also to the lenders due diligence in respect of the NAB Facility and with the form of the assignment documentation.
The lender will maintain all existing NAB securities but will, upon repayment of the working capital facility and repayment of all outstanding hire purchase liabilities, release both the Company and PharmAust Manufacturing Pty Ltd from the existing debentures in favour of the NAB.
The Company will make a further announcement in relation to the terms of the required rights issue in the near future.
