26th May 2015 10:02
LONDON (Alliance News) - Metal Tiger PLC Tuesday said it is taking steps to protect its interest in fellow AIM-listed New World Oil and Gas PLC after it said it has only received a fraction of the shares that it had purchased, as the confusion surrounding New World's shareholding continues.
New World shares remain suspended from trading because of delays in share transactions which caused confusion regarding a new investor's shareholding, but now Metal Tiger also has confirmed that it too has faced delays in receiving shares it purchased in New World.
At the end of April, Metal Tiger purchased just under 47.1 million New World shares for a total consideration of GBP31,526 which gave Metal Tiger a 6.7% stake in New World. However, Metal Tiger then sold 28.7 million New World shares over the course of May 8 and May 11 to generate gross proceeds of GBP169,891.
At the time of the sale, Metal Tiger said all of the 47.1 million shares acquired should have been settled and been delivered in accordance with the written contract notes, but said as of Tuesday it has only received a fraction of the shares.
Only 2.9 million of the 47.1 million shares, or 6.2% of the shares acquired, have been delivered to Metal Tiger's retail broking account, meaning of the GBP169,891 generated from the sale of shares in May, only GBP17,243 has been released to Metal Tiger, reflecting the proportion of stock delivered and settled on the company's retail stockbroking account.
"Metal Tiger has taken various steps over the past fortnight to protect its interests, including the appointment of legal counsel with regard to both the payment of monies due to Metal Tiger from disposals made of New World shares, and to secure the receipt of the balance of its shares acquired on-market in New World," said Metal Tiger on Tuesday.
Metal Tiger Chief Executive Cameron Parry and Executive Director Paul Johnson attended New World's extraordinary general meeting held last Tuesday to represent the company.
"During the meeting Cameron Parry and Paul Johnson were able to actively participate and put forth a series of questions to the New World chief executive with regard to New World's historical performance, rationale behind the financing proposed and the structure of the financing proposal, and the forward plans for New World," said Metal Tiger.
"Metal Tiger's directors continue to take steps that the board believes are in the best interests of Metal Tiger shareholders and protect Metal Tiger's interests," said Parry.
"In relation to the New World investment, we have been unequivocally clear that any future financings by New World should reflect the evident market demand for New World stock, and also the fact that the share price of New World has in recent weeks traded considerably higher than the previously proposed placing price of 0.055 pence - itself priced at a 42% discount to the then market price of 0.095 pence," he added.
On April 29, when Metal Tiger acquired the 47.1 million shares, New World conducted a conditional placing of over GBP2.72 billion new shares at 0.055 pence, which was then rejected by New World shareholders at the meeting held last Tuesday.
After the proposed placing, New World had said Judith Williams, an new investor in the company had bought over 324.3 million shares in the company via the placing, which was stated as representing a 10% stake in the company's enlarged issued share capital.
However, just before the extraordinary general meeting, New World said Judith Williams had an interest in 173.1 million shares in the company, or a 24.63% interest in the company, which was below the threshold for Williams to make a takeover offer for the company under UK takeover rules.
The size of William's stake had been, and still is, a source of confusion. On May 14, Williams was confirmed to have a 35.63% stake in the company, which under UK takeover rules would usually mean she would be required to make a cash offer to all other stakeholders.
On May 13, the Mail Online reported that the purchase had actually been conducted by Williams' son, who thought he was only purchasing a 10% stake in the company before realising that his mother may be required to launch a full offer for the company.
However, that placing was rejected by New World shareholders, and the London Stock Exchange said last Thursday that shares in New World will remain suspended due to "delays in the settlement of transactions in the shares of New World Oil". The LSE said it also was "monitoring the settlement situation in this security which has continued to deteriorate."
The stake that Williams holds in the company is likely to change again dependent on the delivery of shares, and because the placing was rejected.
As the placing was rejected by shareholders, New World will have to rely on an open offer to raise cash, which Cornhill Capital, the placing agent, had agreed to underwrite for up to GBP1.5 million.
On Tuesday morning, Metal Tiger shares were down 7.0% to 1.00 pence per share, whilst New World shares remain suspended.
By Joshua Warner; [email protected]; @JoshAlliance
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