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

SUNCORP BLOWS NATURAL DISASTERS BUDGET BY $40 MILLION

Suncorp Bank (ASX: SUN) has announced that its natural disasters claims costs have blown out by $40 million from its ...

HIGHER OIL PRICE BOOSTS SENEX REVENUE IN SECOND QUARTER

BRISBANE-based oil and gas producer and explorer Senex Energy (ASX: SXY) has increased sales revenue 28 per cent i...

STAFF CHURN BLAMED FOR MCGRATH EARNINGS DOWNGRADE

MCGRATH will fail to meet earnings forecasts after some of its star real estate agents defected to growing Perth firm...

MCBAIN RESIGNS AS BELLAMY'S DIRECTOR WHILE THIRD CLASS ACTION MOVES CLOSER TO SECURING FUNDING

LAURA McBain (pictured) has resigned as a director of Bellamy's Organic (ASX: BAL) today, effective immediatel...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter