The Takeovers Panel has ordered Energy Resources of Australia (ERA) to suspend trading in new shares for at least five business days in relation to its share entitlement offer announced in November last year.
The panel’s interim orders stated that ERA must “take all action necessary” and also postpone the entitlement offer closing date by five or more business days.
ERA, with the support of Rio Tinto through its subsidiary North Limited, announced plans last year to raise $476 million to fund the the Ranger uranium mine rehabilitation in the Northern Territory.
The company planned to raise these funds by offering new, fully paid ordinary shares at $0.15 per share.
Shortly after this announcement, the Takeovers Panel ruled this “unacceptable,” stating that Rio Tinto’s plans to support the raising would dilute minority shareholders’ stakes.
Rio Tinto subscribed to its full entitlement of around $326 million as ERA’s largest shareholder and acted as the underwriter for the offer in ERA’s incapacity to do so.
“The Review Panel is conducting proceedings and considered the interim orders were appropriate to maintain the status quo while it continued to consider the review application,” the Takeovers Panel stated in a media release.
ERA stated it would suspend trading until January 21 and postpone the entitlement offer close date until January 28.
“Accordingly, new shares will not commence trading on a deferred settlement basis tomorrow,” ERA confirmed.
“ERA will keep shareholders updated to any material developments with respect to this matter.”
The Ranger uranium mine is set to close by January 2021 after ERA had failed to receive permission to continue operations from the Mirrar Traditional Owners and Gundjeihmi Aboriginal Corporation.
The mine has produced more than 126,000 tonnes of uranium oxide under various owners since the 1980s.