TORONTO, March 1, 2012 /CNW/ - Pala Investments Holdings Limited ("Pala") announced today that Pala has entered into two agreements relating to proposed purchases of securities of Asian Mineral Resources Limited ("AMR"); namely, a subscription agreement (the "Subscription Agreement") and a share purchase agreement (the "Share Purchase Agreement"). Each of the proposed purchases is subject to the completion of satisfactory due diligence by Pala and certain other conditions. The Subscription Agreement provides for the purchase by Pala of 71,666,667 units from AMR on a private placement basis at a price of CDN$0.06 per unit. Each unit consists of one common share of AMR and one half of one common share purchase warrant ("Warrant"). Each Warrant will entitle Pala to purchase one common share of AMR at a price of CDN$0.10 for a period of five years from the closing of the private placement. Pala has concurrently entered into the Share Purchase Agreement with two shareholders, Mellford Pte. Ltd. and Sword Investments Private Limited, each of which is an affiliate of the Tecity Group, holding a total of 49,481,600 common shares of AMR, representing approximately 24.4% of the 202,934,435 issued and outstanding common shares of AMR, as known by Pala. The consideration to be paid by Pala for each common share of AMR under the Share Purchase Agreement will be CDN$0.06 per common share. These AMR common shares will be acquired by way of a private purchase, made in reliance on the private agreement exemption set out in Section 4.2 of Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids and Section 100.1(1) of the Securities Act (Ontario).
Pala does not currently own or control any securities of AMR. Pala intends to acquire the common shares and warrants for investment purposes and may increase or decrease the investment depending upon future market conditions. Assuming that closing of both the private placement and share purchase occurs, Pala will own and control, directly and indirectly, a total of 121,148,267 common shares representing approximately 44.1% of the issued and outstanding shares of AMR (on an undiluted basis), as known by Pala. It will also own 35,833,333 Warrants.
Concurrent with entering into the Subscription Agreement and Share Purchase Agreement, Pala has also entered into:
- a right of first refusal agreement with Malaysia Smelting Corporation Berhad ("MSC"), which is also a Tecity Group affiliate, whereby MSC has granted Pala a right of first refusal over MSC's shareholding in AMR (currently 31,297,661 AMR common shares representing 15.4% of the outstanding shares).
- a voting and support agreement with MSC whereby MSC is unconditionally obligated to vote its AMR common shares in favour of the transaction contemplated by the Subscription Agreement and is prohibited from disposing of any of its AMR common shares or engaging in activities in furtherance of a transaction whereby a third party would acquire any shares of AMR;
- a voting and support agreement with Asian Lion Limited whereby Asian Lion is unconditionally obligated to vote its AMR common shares in favour of the transaction contemplated by the Subscription Agreement and is similarly prohibited from disposing of any of its AMR common shares or engaging in activities in furtherance of a transaction whereby a third party would acquire any shares of AMR.
Concurrent with the closing of the private private and share purchase, AMR and Pala will also enter into an investor rights agreement pursuant to which Pala will have pre-emptive rights to subscribe for additional securities of AMR and the right to designate two board nominees provided Pala holds 10% or more of the outstanding shares of AMR.
Pala is entitled to conduct due diligence until April 4, 2012 and to be paid a break fee of CDN$600,000 under certain circumstances, including if AMR enters into a transaction with a third party or fails to obtain regulatory or shareholder approval for the transaction. The transaction has an outside closing date of July 6, 2012 and is subject to obtaining required regulatory approvals and approval by AMR's shareholders to be sought at a special meeting of AMR's shareholders.
Pala's address is 12 Castle Street, St. Helier, Jersey JE2 3RT. For further information please refer to the Early Warning Report posted on SEDAR or contact Colin Murray at 011 41 41 560 9070.
Pala is a multi-strategy investment company dedicated to investing in, and creating value across the mining sector in both developed and emerging markets. Pala's exclusive investment advisor, Pala Investments AG, has extensive experience within the mining sector. Pala Investments seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative financing solutions. For more information, visit www.pala.com.
Certain statements in this press release are forward-looking statements and are prospective in nature, including statements with respect to Pala's future intentions regarding the securities of AMR that it owns and statements relating to the closing of the above transactions. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Such forward-looking statements should therefore be construed in light of such factors, and Pala is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information:
Colin Murray at 011 41 41 560 9070