Business Day reported that Coal baron Ken Talbot will increase his holding in Sundance Resources Limited to 22% after purchasing USD 5 million worth of shares in the iron ore explorer.
Mr Talbot's investment vehicle of Talbot Group Investments Private Limited is the company's largest shareholder with a 19.74% stake. It has agreed to purchase a further 62.5 million shares at 8 cents each.
Mr Talbot is a non executive director of the company and the founder of Queensland coal producer Macarthur Coal Limited.
The AUD 5 million placements to TGI, comprising the issue of 62.5 million shares at 8 cents per share, will increase TGI’s interest in the Company to 22.14%. The placement is subject to shareholder approval. TGI has been a cornerstone investor in Sundance since 2007 and participated in the last major capital raising undertaken by the Company.
The Share Purchase Plan Offer will be open to all Sundance shareholders with a registered address in Australia and New Zealand. The Offer will open on March 27th 2009 and close at 5.00 PM on Friday April 24th 2009.
Australian financial services firm BBY Limited has agreed to underwrite AUD 5 million of the offer such that the Company expects to raise a minimum of AUD 10 million from the proposed placement and Offer. Under the Offer, eligible shareholders will have an opportunity to acquire up to AUD 5,000 worth of new shares free of brokerage or other transaction charges. The price of these new shares under the Offer will be the lower of 8 cents per share, 5% discount to the volume weighted average price to three decimal places of shares traded on the ASX in the five trading days up to and including the scheduled offer closing date.
The funds raised through the placement and Offer will strengthen Sundance’s financial position and underpin continued development of the Company’s majority owned Mbalam Iron Ore Project in Central West Africa.
Mr Don Lewis CEO of Sundance said that "The proposed placement and Share Purchase Plan Offer will supplement our existing cash reserves to ensure that the Company has funding in place to continue its current activities on the Mbalam Project through to 2010. This will allow us time to develop arrangements with potential strategic partners and ensure that we are best positioned to advance the project as and when global financial conditions improve.”
He said that “We are very pleased that our largest shareholder has committed to support the Company by subscribing for the share placement at 8 cents per share. As Ken Talbot is a Director of the Company, it is necessary for this placement to TGI to be approved by shareholders and a General Meeting of shareholders will be held on April 29th 2009 for this purpose. We are also pleased to extend the Share Purchase Plan Offer to eligible shareholders such that they can invest in the Company on the same, or better, pricing terms as proposed for the placement to our major shareholder. The underwriting of BBY Limited offers very valuable market support for the Offer.”
Mr Lewis said that “Sundance controls a world scale project at Mbalam which offers the opportunity for development of an international iron ore business. After taking into consideration the funding risks imposed by current market conditions, the Board strongly supports the placement to Talbot Group Investments and the Offer to eligible shareholders.”
The Notice of Meeting and Offer booklets and application forms will be mailed to shareholders with registered addresses in Australia and New Zealand who are on the share register as of the record date 7.00 PM on March 24th 2009. These shareholders can expect to receive the booklet during the following seven days.
If the total number of shares applied for under the Share Purchase plan exceeds 30% of the number of ordinary securities already on issue, Sundance will be required to ‘scale back’ applications. If this occurs, shareholders may be allotted shares to a value which is less than they applied for.
