[miningmx.com] — THE standoff between First Uranium and its
disgruntled minority shareholders has taken another turn, as the failed gold miner
described an alternative proposal for the sale of its key assets as having “zero chance
of being accepted’.
In an e-mail sent to First Uranium’s board of directors on Monday, Russia’s Olma
Investments and other shareholders holding a collective stake of 18% in the group,
set out their requirements for dropping their opposition to the sale of Ezulwini and
Mine Waste Solutions (MWS) to Gold One International and AngloGold Ashanti
respectively.
The vote on the transactions is scheduled for June 13.
The sale of Ezulwini (for $70m) and MWS ($335m) had originally been prompted by
the looming payment of around $320m in debt, in deals that would see shareholders
receiving no more than $0.11 per share. First Uranium did its last capital raising in
March 2011 at $1.00 per share.
Olma and the other shareholders have now asked AngloGold to increase its offer price
for MWS by 15% to $385m. Similarly, Gold One has been asked to up its offer for
Ezulwini, also by 15%, to $80.5m
Furthermore, First Uranium’s debenture and note holders have been asked to accept a
10% and 5% discount respectively on the nominal value of the debt, which would free
up another $23.1m in cash.
This alternative arrangement would see shareholders receiving between $0.45 and
$0.55 per share.
“We believe that this improved transaction structure represents a compromise
solution and would be acceptable for all classes of stakeholders in the company,’ read
Olma’s email.
“We urge you to negotiate proposed conditions with all the parties involved as soon
as possible [and] provide us a formal response.’
In a response issued on Tuesday, First Uranium Lead Independent Director John Hick
said the group already knew that neither AngloGold nor Gold One would be willing to
reopen negotiations.
“Given our extensive interaction with the debt holders, which resulted in the
compromises set out in the company’s management information circulars, the idea of
these parties and . agreeing to the proposed concessions is equally implausible,’
said Hick.
“The dissidents’ demands and lack of an alternative “concrete proposal’ . confirm they
have no better alternative to offer than the plan which has already been approved by
First Uranium’s board.’
Olma’s head of equities, Nick Betsky, told Miningmx he was disappointed that
the board didn’t even consider putting the alternative suggestions to the buyers of
the assets and bond holders.
“It’s just another way to show that they don’t care for shareholders,’ Betsky said.
First Uranium’s executive team is due for $1.6m in bonuses – $1.36m in terms of a cash bonus plan and another $285,000 as retention bonuses – following the winding up of the company, according to an earlier circular.
“We’ll continue to fight,’ Betsky said. “We know there are better buyers out there and I think you can expect a superior proposal before the vote takes place.’
