Era Resources Inc. (TSX-V: ERX) today announced a proposed plan of arrangement pursuant to which Cayman Islands based private equity firm Sentient Group will take the company private.
The arrangement will involve, among others things, 1) a share consolidation on the basis of 10,290,619 pre-consolidation common shares to one post-consolidation common share. Shareholders who would receive less than one whole post-consolidation share, will have their fractional post-consolidation common share purchased at $0.25 in cash per share held by them immediately prior to the consolidation and 2) the cancellation of all outstanding options to acquire common shares.
The $0.25 price per pre-consolidation common share represents a 26.1% premium to the volume weighted average trading price of the shares for the five trading days prior to April 3, 2017.
The transaction values Era Resources at approximately $31 million in equity value and $2.22 million to minority shareholders.
On April 3, 2017, Sentient Global Resources Fund IV, L.P. converted US $25,926,130 principal amount of convertible debentures at $0.25 per share into 112,669,627 common shares, representing approximately 90.8% of the outstanding common shares.
Sentient Global Resources Fund II, L.P., Sentient Global Resources Fund III, L.P. and Sentient Global Resources Fund IV, L.P. collectively hold 115,169,157 common shares, representing approximately 92.8% of the outstanding common shares. As the Sentient Group owns over 90% of the common shares, the arrangement is exempt from the minority shareholder approval requirements.
Sentient Global Resources Fund IV, L.P. holds US $41 million principal amount of convertible debentures entitling the Sentient Group to acquire up to an additional 195,755,600 common shares.
Era Resources has called a special meeting of the shareholders to be held in Toronto, Ontario at 10:00 a.m. (Toronto time) on June 6, 2017, at which the arrangement will be voted upon by the shareholders. The arrangement must be approved by special resolution of not less than two thirds of the shareholders present in person or by proxy at the meeting.
Era Resources Inc., formerly Marengo Mining Limited, is a Canadian-domiciled mineral resource company focused on the discovery, exploration and development of base metals globally. The company’s flagship project, the 100% owned Yandera copper project, is strategically located within the Bismarck Intrusive Complex of Papua New Guinea (PNG), host to world class ore bodies such as Grassberg, Ok Tedi, Porgera, Hidden Valley, Wafi/Golpu, and Frieda River.
photo credit: Era Resources
Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.