Central Asia Metals PLC announces its intention to raise approximately US$153.5 million (approximately £113.0 million) through a fully underwritten placing of new ordinary shares of US$0.01 each in the Company (the Company Placing Shares) with both existing investors and new institutional investors (the Company Placing). In addition to the Company Placing, CBH Europe Limited, on behalf of Kenes Rakishev, a Non-Executive Director of CAML, intends to sell approximately 10.6 million existing ordinary shares of US$0.01 each in the Company.
The proceeds of the proposed Company Placing will represent approximately 39.6 per cent. of the Company’s current market capitalisation based on the closing share price on 1 September 2017 being the date on which the Company’s shares were suspended.
The proceeds of the Company Placing are to be used to fund part of the cash portion of the consideration for the proposed acquisition by CAML of Lynx Resources Limited (Lynx), from Orion Co-Investments III L.P. (Orion) and Fusion Capital AG (together the Sellers) for consideration of US$402.5 million (the Acquisition), which the Company has separately announced today. Further details of the Acquisition are contained in that announcement. The Placing is not conditional upon completion of the Acquisition.
Mr. Rakishev intends to sell approximately 10.6 million existing ordinary shares in order to release liquidity and manage his broader investment portfolio (the Sale Shares and, together with the Company Placing Shares, the Placing Shares). The placing of the Sale Shares will be conducted in addition to the Company Placing. The Sale Shares represent approximately 9.5 per cent of CAML’s existing issued share capital. Following the placing, Kenges Rakishev is expected to hold approximately 10.6 million ordinary shares in the Company.
The Company Placing and the placing of the Sale Shares (together the Placing) is being conducted through an underwritten accelerated bookbuilding process (the Bookbuilding Process) which will be launched immediately following this announcement. The Placing is subject to the terms and conditions set out in the Appendix (which forms part of this announcement).
It is currently anticipated that the AIM Admission Document will be posted to shareholders, and trading of CAML’s shares will recommence, on 25 September 2017.
J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove, (J.P. Morgan Cazenove) and Peel Hunt LLP (Peel Hunt) are acting as Joint Bookrunners in connection with the Placing (the Joint Bookrunners). Mirabaud Securities Limited (Mirabaud, and together with the Joint Bookrunners, the Banks) is acting as Co-Lead Manager in connection with the Placing.
Details of the Placing
The Placing is subject to the terms and conditions set out in the Appendix (which forms part of this announcement). The Bookbuilding Process will open with immediate effect following this announcement. The number of Placing Shares and the price per ordinary share at which the Placing Shares are to be placed (the Placing Price) will be fixed at the close of the Bookbuilding Process. The timing of the closing of the Bookbuilding Process, pricing and allocations are at the discretion of the Joint Bookrunners and the Company. Details of the Placing Price and the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuilding Process.
The Placing has been underwritten by the Joint Bookrunners subject to the conditions and termination rights set out in the placing agreement between the Company and the Banks (the Placing Agreement) and the block trade agreement between CBH Europe Limited and the Joint Bookrunners (the Block Trade Agreement). Further details of the Placing Agreement and Block Trade Agreement can be found in the terms and conditions of the Placing contained in the Appendix to this announcement.
The Company Placing Shares will not be eligible for the interim dividend declared on 22 September 2017 and payable on 27 October 2017 but will, in all other respects, rank pari passu in all respects with the existing ordinary shares of US$0.01 each in the capital of the Company (the Existing Ordinary Shares). The Selling Shareholder Placing Shares are credited as fully paid and rank pari passu with the existing Ordinary Shares although will be transferred ex dividend of the interim dividend declared on 22 September 2017 and payable on 27 October 2017. The Company has undertaken to the Joint Bookrunners that, until 180 days after the date of readmission of the enlarged share capital of the Company following the Company Placing and the issue of the Consideration Shares to trading on AIM (Readmission), it will not, without the prior written consent of the Joint Bookrunners, enter into certain transactions involving or relating to the Ordinary Shares, subject to certain carve-outs agreed between the Joint Bookrunners and the Company.
Application will be made to the London Stock Exchange for the Company Placing Shares to be admitted to trading on AIM (Admission). It is currently expected that settlement of all of the Placing Shares and Admission will take place at 8.00 a.m. on or around 12 October 2017. The Placing is conditional upon, among other things, the consent of the Acquisition and the Placing by the Company’s shareholders at the General Meeting, applicable consent by the Kazakh government for the issue of the relevant shares, Admission becoming effective and the Placing Agreement becoming unconditional and not being terminated in accordance with its terms. The Appendix sets out further information relating to the Bookbuilding Process and the terms and conditions of the Placing.
The Selling Shareholder is CBH Europe Limited as holder of 10,605,875 Ordinary Shares which were pledged to it by Mr Rakishev, one of the Company’s Non-Executive Directors, pursuant to arrangements announced by the Company on 5 May 2017. Mr Rakishev is the beneficial owner of and continues to have an interest and voting rights in respect of these Ordinary Shares and he has authorised their sale.
The Selling Shareholder has entered into an agreement with the Joint Bookrunners in respect of the sale of these shares and pursuant to which the Joint Bookrunners will be paid certain commissions and expenses by the Selling Shareholder. The Selling Shareholder Placing is underwritten by the Joint Bookrunners. The Selling Shareholder Placing is conditional upon, amongst other things, the Company Placing and Admission. The Selling Shareholder has also given a standstill undertaking to the Joint Bookrunners not to enforce its security in relation to these Selling Shareholder Placing Shares prior to Admission or the termination of the Placing.
Mr Rakishev remains the legal and beneficial owner of a further 10,605,876 Ordinary Shares which remain subject to a pledge in favour of JSC CenterCredit Bank (CenterCredit) as announced by the Company on 2 July 2014.
Mr Rakishev has entered into an irrevocable undertaking to vote in favour of the Resolutions in respect of all of the Ordinary Shares he is beneficially interested in, totalling 21,211,751 Ordinary Shares. In respect of the 10,605,876 Ordinary Shares Mr Rakishev will be interested in following Admission, he has entered into a lock-in agreement pursuant to which he has agreed that for a period of 90 days from Admission he will not, without the prior written consent of the Joint Bookrunners, sell or contract to sell, grant any option over or otherwise dispose of any such Ordinary Shares (or any interest therein), or enter into any transaction with the same economic effect as any of the foregoing, other than pursuant to any security granted by him to CenterCredit. CenterCredit has agreed that should it become entitled to these shares during this period it has agreed that it will comply with the terms of the lock-in given by Mr Rakishev.
The relationship agreement with Mr Rakishev will be terminated with effect from Admission as Mr Rakishev’s interests in the Company will be below 14 per cent. of the enlarged share capital following Admission.