Subiaco-based Summit Resources is planning an $8 million rights issue to fund commitments under its Isa uranium joint venture with Paladin Energy and to settle a legal action with Areva.
Subiaco-based Summit Resources is planning an $8 million rights issue to fund commitments under its Isa uranium joint venture with Paladin Energy and to settle a legal action with Areva.
Summit will offer a fully underwritten 1 for 66 renounceable right issue of fully paid ordinary shares in Summit at a price of $2.48 for each new share to raise $8.07 million.
The rights issue is being fully underwritten by Patersons Securities.
The funds will specifically be used to pay for exploration work on Summit's Isa North tenement, meet commitments to its joint venture and pay $4.5 million to Areva to settle a previously undisclosed litigation.
Paladin holds 82.05 per cent of Summit and Areva holds 10.03 per cent of the company.
See full company statement below:
Summit Resources Limited (Summit) is pleased to announce that it will be undertaking a fully underwritten 1 for 66 renounceable rights issue of fully paid ordinary shares in Summit (New Shares) at a price of $2.48 for each New Share (Rights Issue) to raise approximately $8.07 million.
Purpose and use of funds raised
The purpose of the Rights Issue is to raise funds to be used for further exploration work on Summit's Isa North tenements, to meet commitments under the Isa Uranium Joint Venture with Paladin Energy Limited (Paladin), to meet its obligations to pay A$4.5 million to Areva NC Australia Pty Ltd (Areva) in full and final settlement of the previously disclosed litigation and to meet Summit's ongoing general operating and administration costs.
Should Summit require additional funding for the above purposes prior to the close of the Rights Issue, it has agreed in principle with Paladin for Paladin to provide a short term loan facility to Summit on commercial terms. In that case, the funds raised from the Rights Issue will be used in part to repay any amounts lent to Summit by Paladin under that facility.
Basis of participation
Under the Rights Issue, Eligible Shareholders (as defined below) will be entitled to apply for 1 New Share at a price of $2.48 per New Share for every 66 Summit shares held by them at 4.00 pm (Perth time) on 11 November 2010 (Record Date) subject to the terms of the Rights Issue (Rights). The full terms of the Rights Issue are outlined in the Rights Issue Booklet that will be released to ASX today and mailed to Eligible Shareholders following the Record Date.
The Rights are renounceable. This means that Eligible Shareholders who do not wish to take up all or some of their Rights may sell or transfer some or all of their Rights.
Trading of Rights will commence on ASX on 5 November 2010 and will cease on close of trading on 25 November 2010. Rights to which Eligible Shareholders are entitled may be sold on ASX between these dates should they choose not to take up their Rights in full.
Eligible Shareholders
Summit is making the Rights Issue available to Eligible Shareholders only. Eligible Shareholders are those persons who:
are the registered holder of Summit shares at the Record Date and have a registered address in Australia or New Zealand;
are not in the United States or a U.S. Person or acting for the account or benefit of a U.S. Person (each as defined in rule 902 of the U.S. Securities Act of 1933, as amended); and are eligible under all applicable securities laws to take up or sell their Rights.
The Rights Issue is not being extended to any Summit shareholder with a registered address outside Australia and New Zealand.
Underwriting
The Rights Issue is fully underwritten by Patersons Securities Limited (Patersons) pursuant to an underwriting agreement between Patersons and Summit dated 2 November 2010 (Underwriting Agreement). The Underwriting Agreement includes terms that are customary in an agreement of its nature, including terms permitting Patersons to terminate the agreement on occurrence of certain events.
Patersons has entered into sub-underwriting agreements with Paladin and Areva NC Australia Pty Limited (Areva). Under these sub-underwriting agreements, Paladin and Areva have committed to Patersons to sub-underwrite the Rights Issue on terms consistent with the Underwriting Agreement by subscribing for New Shares in respect of Rights not taken up, or not able to be taken up, under the Rights Issue, in proportion to their respective shareholdings in Summit.
No Prospectus/Shareholder approval
The Rights Issue is being made pursuant to section 708AA of the Corporations Act 2001 (Cth) (Corporations Act) which permits Summit to conduct the Rights Issue without issuing a prospectus. Instead, Summit has lodged with ASX a notice in accordance with section 708AA(2)(f) of the Corporations Act and Eligible Shareholders will receive the Rights Issue Booklet that contains information detailing how to participate in the Rights Issue and to sell their Rights if they choose to do so. A copy of the offer document has been lodged with ASX.
