27th Jan 2015 09:51
LONDON (Alliance News) - Baker Steel Resources Trust Ltd said Tuesday that it plans to raise GBP100 million through a placing and open offer to fund the acquisition of additional investments.
Baker Steel plans to use the proceeds from the issue to make investments according to its investment policy, including up to GBP20 million in existing investments.
If the investment company is unsuccessful in raising GBP100 million, it said it intends to institute a placing programme to raise the remaining funds over the next year.
Baker Steel is proposing that the shares be issued at a 15% discount to its net asset value, although it did not disclose a set price. Baker Steel said its net asset value per share as of December 31, 2014, was 44.9 pence, making the proposed discounted price 38.20p.
Shares in Baker Steel are trading down 0.9% at 28.00 pence Tuesday morning.
The company has entered into an agreement to acquire a portfolio of investments with a value of GBP18.60 million, and has the potential to acquire further investments with a value of up to GBP60.72 million.
Baker Steel has been granted a waiver to UK takeover code which would require it to make a mandatory offer that would normally be obliged as a result of these acquisitions.
The company said its looking to "significantly increase" its size through these acquisitions, which it believes will make it a "stronger investment proposition".
Baker Steel said that its investment manager believes the commodities cycle is "close to its trough and that current market conditions therefore represent an attractive time to be investing in mining and resources assets."
The company is convening an extraordinary general meeting to get shareholder approval for these actions, and will also seek to amend its existing articles to postpone a vote on the winding up of the company. Under its existing articles it is required at the annual general meeting in 2015, and each third annual general meeting, to propose a special resolution to the affect that the company is wound-up.
However, it said that in light of its proposed acquisitions and placing, it believes it is appropriate to delay this vote until the annual general meeting in 2018.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Baker Steel