Global Asset Management to delist


Global Asset Management to delist

Published Date: 2019-03-13 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Global Asset Management to delist

The AltX-listed company has launched a scheme of arrangement, alongside a mandatory offer from large shareholder ARC.

Global Asset Management has offered to buy out minority shareholders at a big discount to its current shareholders so that it can delist from the JSE's AltX. It's R2.10 per share offer will run alongside a mandatory offer from its largest shareholder, African Rainbow Capital (ARC).

Last year, a rights offer aimed at raising R67 million in fresh equity capital from shareholders was unsuccessful after it sold only R2.3 million of the rights shares. Instead, it raised capital from new investors. While ARC declined to subscribe for stock in the rights offer, it agreed last month to buy 27.3-million of Global's shares at R1.83 each. That has raised its stake in the company to above the 35% threshold that triggers a mandatory offer to minority shareholders. It must offer them the highest price it has paid for Global's stock in the past six months, being R1.83. ARC now owns a 45.3% stake.

Global's R2.10 offer represents a 176% premium to the 30-day volume weighted average traded price of 76c at which its shares traded up to 13 August, the day before it first issued a cautionary announcement.

Global said when it listed it planned to invest in various waste-to-energy projects using proprietary technologies and had secured two large institutional investors in the past six years who bought into its energy initiatives. It said the cash received from ARC's subscription would be used to complete the construction of its first fully-fledged waste plastic to oil plant. It has already established two pyrolysis plants to convert waste rubber into oil.

The company also said there was a lack of liquidity in its shares and being listed was expensive, while meeting regulatory requirements took up too much of its executives' time and energy.

It said an independent board unanimously recommended shareholders vote in favour of the scheme. Shareholders representing almost 69% of Global's shares have already agreed to support the scheme. The scheme notice will be posted at the end of the month.

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