ISR waives sale condition for mining asset purchase to go through
ISR Capital's long-drawn S$3 million acquisition of a
rare-earth mining asset in Madagascar will finally come to fruition as it has
waived a sale condition so the deal can be completed, the investment company
announced on Monday.
Completion of the deal was now scheduled to take place on
Monday.
ISR has faced numerous queries by the Singapore Exchange
over its purchase of the 60 per cent stake in Tantalum Holding (Mauritius)
(THM), which fully owns Tantalum Rare Earth Malagasy SARLU (TREM). The latter
holds an exploration licence for a rare-earth mining concession in Madagascar.
The market regulator's queries have, among other issues, cast a spotlight on
the valuation of the acquisition target.
The purchase has been in the works since June 2016.
The waived condition relates to ISR and the seller REO
Magnetic agreeing on the project's cash flow budget and liquidity plan.
"As further studies will be conducted on the project
after the completion, including but not limited to environmental impact
assessment and feasibility study, the board is of the view that the cash flow
budget and liquidity plan will be more reliable if these are prepared
concurrently" with and using the results of those studies after the
completion of the acquisition, the company said in its filing with the
exchange.
ISR will allot and issue 747 million new shares at 0.4
Singapore cent apiece for the purchase around Jan 2, bringing the total number
of issued and paid up shares in the company to nearly 3.91 billion.
To facilitate the deal's completion, the parties have
further agreed to extend the long-stop date to Jan 3, 2019.
At an extraordinary general meeting (EGM) in October where
shareholder approval was achieved, executive chairman Chen Tong said it was not
confirmed as to whether the full mining licence would ultimately be granted to
them.
A renewal application was sent in December 2016, but the
licence has not been renewed since.
ISR closed at 0.4 Singapore cent, up 0.1 Singapore cent or
33.3 per cent.
Yunita Ong
01 January 2019
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