Lotus Resources (ASX:LOT) and A-Cap Energy (ASX:ACB) have signed of a scheme implementation deed (SID) to merge by way of a court-approved scheme of arrangement.
A-Cap unanimously recommends its shareholders vote in favour of the offer, in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) it’s in the best interest of shareholders.
In addition, A-Cap’s largest shareholder Singapore Shenke International Investment, which has a 37.95% shareholding, intends to also vote in favour, A-Cap reports.
Thomson Geer is acting as legal advisor to Lotus in relation to the merger. Canaccord Genuity (Australia) is acting as financial advisor and Ashurst is acting as legal advisor to A-Cap.
A-Cap confirms that the draft scheme booklet has been lodged with the Australian Securities & Investments Commission (ASIC) for review and the first court hearing before the Federal Court of Australia for orders to convene the share scheme meeting and option scheme meeting is scheduled to be heard on September 2023.
In the event that the Federal Court makes the orders sought to convene the meetings and assuming also that the scheme booklet has been registered by ASIC, it is anticipated that the booklet will be publicly released on either 15 or September.
On implementation of the share scheme, the two companies will combine to form a merged African-focused uranium player, which both report will have significant scale and resources by combining production-ready Kayelekera Uranium Project in Malawi with future large-scale growth asset the Letlhakane Uranium Project in Botswana.
Lotus, which has a $343 million market capitalisation, reports the merger brings together two synergistic projects located along a similar geological trend. Combined the projects offer a 241.5 million pound resource base (100% basis), which the companies say is one of the largest in the world.
The merged entity will also increase financing flexibility to fast-track project development and offers an ‘enhanced’ ability to source future debt and equity financing de-risks project development.
Both parties report the combined team will have a track record of financing and developing uranium projects, with deep experience in uranium marketing, contracting and sales.
Under the share scheme, Lotus will acquire 100% of the A-Cap shares whose shareholders will receive 1 new Lotus share for every 3.54 A-Cap Shares held on the scheme record date.
Lotus shareholders will hold some 79% of the merged group and A-Cap shareholders will hold the remaining 21%. A-Cap is an $82 million market capitalisation company.
Key conditions to the implementation of the share scheme include, amongst others, A-Cap shareholders approving the scheme and the option scheme by the requisite majorities. Regulatory approvals in Australia and Botswana are also required, including court approval of the scheme.
Write to Adam Orlando at Mining.com.au
Images: Lotus Resources
