11th Nov 2015 14:54
LONDON (Alliance News) - Oilex Ltd on Wednesday said that Zeta Resources Ltd has alleged that the company "failed to disclose material information" before Zeta's initial investment in the company, which was announced in July.
Oilex said it will vigorously defend the claim.
"Zeta has alleged that the company has failed to disclose material information to it prior to its initial investment and has contravened statutory provisions relating to misleading or deceptive conduct and continuous disclosure and rights issue disclosure requirements," Oilex said.
Under an agreement between the companies, Zeta was to subscribe for AUD4.2 million of 20-year, zero-coupon unsecured convertible loan notes, convertible into Oilex shares at Zeta's option at any time. That was subject to a conversion price of AUD0.0418 per share, by no later than Wednesday this week. In addition, Zeta was to subscribe for 124.0 million new shares at the same price, to enable the issue of those shares to be settled by no later than Thursday.
"As at the date of this announcement, Zeta has failed to settle the subscription for the convertible notes. Oilex will be considering, together with its external legal counsel, the remedies available to it arising out of Zeta's failure to settle the convertible notes," Oilex said.
Zeta currently owns 10.3% of Oilex.
"Whilst Zeta has at this stage only provided limited information to the company regarding the basis of these allegations, Oilex considers them to be without merit and they will be vigorously defended," Oilex said.
Shares in Oilex were down 42% at 0.825 pence on Wednesday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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