Tinashe Makichi Business Reporter
Asa Resource Plc’s former Executive Chairman Yat Hoi Ning is believed to be behind Rich Pro Investment’s bid to takeover the company.
Early this week, Rich Pro Investments (RPI) made an offer to acquire the issued share capital of Asa at 2,1p a share, valuing ASA’s share capital at about £35,5 million. RPI owned by China’s Zhejiang Hailiang Co Ltd is controlled by Feng Hailiang (Ning’s alleged ally).
RPI believes the transaction offers ASA shareholders a premium of 64,7 percent on the closing price of 1,275p a share on July 11; a 30 percent premium to the volume-weighted average price of 1,62p a share from January 1 to July 11; and a 43,9 percent premium to the volume weighted average price of 1,46p a share for the 12 months to July 11.
Further, RPI believes the offer is compelling in light of a number of risks and uncertainties facing Asa, including a material level of outstanding borrowings and creditors that require repayment or refinancing in the near future and a material decrease in net cash in recent years.
In addition, it said there were several uncertainties in terms of the longevity of certain of Asa’s mining licences, while Asa was also exposed to legal disputes, accounting uncertainties and foreign exchange restrictions. RPI also noted that Asa’s management structure needed to be stabilised and strengthened.
The Herald Business is reliably informed that Mr Ning who was fired from the board on externalisation allegations is behind the cash offer to London minority shareholders pursuant to the United Kingdom Takeover Code. China International Mining Group Corporation (CIMGC) is the controlling shareholder of Asa Resource with a 16,3 percent stake while Mr Ning has an individual 6,3 percent shareholding-making him the most powerful individual in the resources company.
“In an attempt to provide a recommendation to its shareholders, the board intends to continue its discussions with RPI in seeking various assurances from RPI about its intentions regarding Asa Resource.
“Shareholders are advised to take no action in relation to this offer and the Board will make a further announcement in due course,” said Asa Resources executive director Barry Dearing.
“In accordance with Rule 2.9 of the Code, the Company confirms that, as of the date of the announcement, it has in issue 1 692 145 443 ordinary shares of 0,1 pence each,” he said.
Rich Pro currently holds under 3 percent of Asa but this rises to 15,7 percent when parties acting in concert with it are taken into account.