23rd Jul 2014 17:28
LONDON (Alliance News) - Strategic Natural Resources PLC Wednesday said it will be delisted from the AIM exchange on Thursday after failing to appoint an AIM nominated adviser within the timeframe set by AIM rules.
The natural resources development company, which is currently struggling to make payments to creditors, lost its previous nominated adviser Allenby Capital Ltd after it failed to announce a planned investment at the right time under AIM rules for companies.
The company had planned to buy a 6% shareholding in US natural gas firm Millennium Energy Corp for GBP660,000 in cash and GBP2 million in shares, issued at 5 pence per share, but the investment fell through on Monday.
Strategic Natural noted on July 1 that it should have announced the investment in May but it failed to do so because it believed that the deal should not be announced until certain conditions had been met.
The company must have a nominated adviser under AIM rules and, after failing to replace Allenby in time, it will now be delisted from the AIM exchange.
The company also said its Chief Operating Officer Michael Drozd has resigned with immediate effect.
Strategic Natural said it will now examine the options available to it and will seek to list the company's shares on an alternative recognized exchange as soon as practically possible.
It added that it will also continue to seek further funding to become available as soon as a relisting occurs.
The company, which owns 74% of the Elitheni Coal Ltd operations in South Africa, earlier this year got into financial difficulty and started to receive demands from creditors for payments it couldn't afford to make. Elitheni faced being put into liquidation because of the cash problems.
In May, Strategic Natural said it had secured an investment of GBP1.5 million in the company, which it would use to pay off at least one creditor,
On July 1, Strategic Natural said it had provided GBP230,000 to Elitheni since May 14, which has been used to pay ZAR2.3 million to creditors and to pay salaries and operating expenses at the company.
The company said the GBP1.5 million payment did not allow it to clear all of its creditors, but it did pay back the most critical creditor payments, including London Commodity Brokers, which had filed a winding-up petition for the company based on the disputes. London Commodity Brokers has since withdrawn the petition.
Strategic Natural also had said that due partly to its decision to invest in Millennium Energy, it had received a further subscription offer from Target Alliance Ltd to invest GBP1.2 million at 3 pence per share into Strategic Natural.
The company had said the offer was conditional upon its share trading suspension being lifted and on shareholder approval, which it expected to receive once a new nominated adviser was appointed.
The firm said the proceeds of the subscription would be used to further pay creditors and meet its working capital needs.
It is unclear how Target Alliance's investment will be affected by Strategic Natural's decision to pull out of its planned investment in Millennium Energy Corp and its AIM delisting.
Strategic Natural Resources remain suspended at 2.88 pence on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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