CUDECO SHAREHOLDERS REJECT $45M FROM KEY CHINESE INVESTOR

Written on the 30 June 2015 by Nick Nichols

CUDECO SHAREHOLDERS REJECT $45M FROM KEY CHINESE INVESTOR

SHARES in Gold Coast copper miner CuDeco surged more than 28 per cent to a high of $1.80 ahead of a trading halt after shareholders failed to approve a new capital raising.

The shares last traded at $1.70, up 30c from Monday's close, with more than 1.9 million shares changing hands before the two-day trading halt took effect.

The latest development in CuDeco's ongoing funding campaign has seen shareholders reject a bid by Chinese investment group Focus Sun Holdings to lift its interest in the company to 18 per cent. This is despite the investor receiving Foreign Investment Review Board approval to do so earlier this month.

CuDeco, which is headed by Wayne McCrae (pictured), announced in May that Focus Sun Holdings planned to subscribe for $50 million worth of shares in two tranches at $1.25 each.

The first tranche of $5 million had already been received, while shareholders needed to approve the second tranche totalling 36 million shares. The second tranche also comprised 20 million options exercisable at $1.25.

Shareholders today rejected the share issue, leading to a surge in the company's share price, despite the company announcing the failed capital raising has created immediate uncertainty for CuDeco.

However, the company says it is confident it can produce an alternative funding proposal by Thursday when it meets with major shareholders.

"The funds from these capital raisings were required to fund the completion of capital works for the Rocklands copper project and provide sufficient working capital for the listing of the company on the Hong Kong Stock Exchange," says the company in a statement to the ASX as it requested the trading halt.

"Due to the obvious continuance of financing required and the uncertainty facing the company we believe it is important that the trading halt is provided to allow for a definitive and informative announcement to be made to the market at the appropriate time.

"Any reinstatement of trading prior to this information being able to be provided would result in trading occurring in a market not fully and properly informed.

"The planning is essential to the company's financial viability as it seeks funding to complete the final works before mining production commences and the company can generate income."

CuDeco says it expects to finalise a smaller capital raising this week, although gives no further details. As part of the original funding deal with Focus Sun Holdings, CuDeco agreed to an introducing fee to an undisclosed party totalling $1.5 million and comprising the issue of 1.2 million shares at $1.25 each.

UPDATE:

CuDeco's shares were expected to resume trading on Thursday morning but have since been voluntarily suspended pending the outcome of discussions with key shareholders.


Author: Nick Nichols

Latest News

CROMWELL TRADES STEADILY IN FIRST HALF

CROMWELL Property Group has maintained a steady operating profit at $0.045 per security in the first half of FY17,...

WHY NEXTDC'S STOCK IS SOARING

AFTER posting its interim result, NEXTDC (ASX: NXT) gained more than 12 per cent on the stock market before noon.
...

PWR PROFIT CRASHES AS DOLLAR RISES AND COSTS MOUNT

A RISING Aussie dollar has offset PWR Holdings Limited's (ASX:PWH) overseas growth in the last half, forcing a...

SUPER RETAIL GROUP RESULTS SHINE ACROSS THE BOARD

A WELL-planned and executed half has paid off for Super Retail Group (ASX:SUL) as it posts a net profit result up ...

Related News

EVERYTHING YOU NEED TO KNOW ABOUT THE NATIONAL BROADBAND NETWORK

THE National Broadband Network (NBN) is more than an internet connection, it is an opportunity to transform your b...

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter