ASX-listed Avenira is to sell its interests in the Baobab Phosphate Project and Novaphos to a consortium of its major shareholders and receive immediate funding support.
Under the transaction:
- The company will receive cash consideration of US$3.0 million, and loan and director fees forgiveness of approximately US$1.2 million, for a total value of approximately US$4.2 million
- Avenira to undertake, for nil consideration, a buy-back and capital reduction of all the existing shares and options held by the major shareholders
- Pending completion of the sale the purchasers will provide loan funding of up to US$1.8 million to BMCC (the Avenira subsidiary which holds the Baobab Project); and
- The purchasers will also make available until completion additional loan funding to Avenira which, if used, will be deducted from the cash consideration. Post Transaction, the new Avenira will have approximately 440.8 million shares on issue, cash consideration of approximately A$4.3 million and no debt.
In addition to providing essential short-term funding, the transaction is attractive given the recent trading history of Avenira:
- The approximately A$6.1 million gross consideration corresponds to an equivalent A$0.014 per Avenira share remaining post completion, a 129% premium to the last traded price of A$0.006; and
- The approximately A$4.3 million cash consideration corresponds to an equivalent A$0.010 per Avenira share remaining post completion, a 64% premium to the last traded price of A$0.006.
As part of the Transaction, Farouk Chaouni and David Mimran (who both represent members of the purchasers) have resigned from the Avenira board, while Timothy Cotton (who is also representing one of the purchasers) intends to resign upon completion.
Further board changes have been agreed with Louis Calvarin stepping down as MD and CEO.
Louis will continue on as a non-executive director (independent) and assist with the transaction completion and intends to resign upon completion.
Brett Clark, (Chairman) will remain with Avenira post completion and will appoint suitably qualified additional non-executive directors at or before that time.
Avenira Chairman, Brett Clark, says:
“We are grateful for the support of Avenira’s shareholders through to this point. With the support of the major shareholders, we have been able to structure a transaction that not only relieves considerable financial stress facing the company, but also affords Avenira shareholders an opportunity to continue with the ability to trade their shares, as well as crystallise the value of the Baobab Project and Novaphos interests.
“Avenira will move to becoming debt free, with cash available to re-examine its large Wonarah Phosphate Project in the Northern Territory and other investment opportunities. Along with Non-executive Director, and fellow Independent Director, Louis Calvarin, we unanimously recommend that Avenira shareholders vote in favour of the Transaction at the upcoming shareholder meeting.
“I would also like to thank Farouk Chaouni and David Mimram for their support as directors / board members over the past few years and wish them well on their future endeavours.
“Finally, I’d like to thank Louis Calvarin for his efforts and guidance for over two years as Managing Director and CEO and look forward to working with him over the next few months to close out the Baobab sales transaction.”