The Panel advises that it has received an application by Westgold in relation to a non-renounceable rights issue prospectus, dated 15 February 2002, issued by Precious Metals Australia Ltd (PMA). The application relates to concerns that Westgold asserts about the effect on the level of control of PMA that an underwriting agreement for the rights issue may have if there is a significant shortfall in the rights issue.
The rights issue is a one for one issue, at 10 cents per share. It is underwritten to $1,200,000, which is approximately 75% of the offering, by companies associated with three directors of PMA. The combined voting power in PMA of the three directors could rise to over 65% if there is a complete shortfall in the rights issue.
Westgold has applied for a declaration of unacceptable circumstances in relation to the disclosure document and the underwriting agreement. It has also applied for interim orders restraining PMA from calling on the underwriting or issuing shares to the underwriters until the Panel has determined the application. PMA's solicitors have indicated that PMA will not issue shares in the immediate future and will not do so without advising the Panel and that interim orders will therefore be unnecessary.
The terms of the rights issue were announced to ASX by PMA on 6 February 2002. The prospectus closes today.
The sitting Panel in this matter is constituted by Elizabeth Alexander AM (sitting President), Kathleen Farrell (sitting Deputy President) and Luise Elsing.
Director, Takeovers Panel
Level 47 Nauru House, 80 Collins Street, Melbourne VIC 3000
Ph: +61 3 9655 3501