African Battery Metals (LSE:ABM) returned from suspension today after a host of proposals aimed at refinancing and restructuring the firm were approved by investors at a general meeting on Friday.
Shareholders in the Africa-focused exploration business voted 99.96pc in favour of all resolutions at the meeting in London. This outcome has, in turn, successfully triggered a number of proposals outlined by the business in a refinancing and strategic update issued last month.
In this, African Battery proposed a conditional placing and subscription to raise £1m at 0.5p a share, resulting in the issue of 200m new ordinary shares. Each of these refinancing shares will have an attached warrant to subscribe for a new ordinary share at a price of 1p within two years.
The money raised will be used to pay all of African Battery’s material company creditors through a mixture of cash and/or shares. In last month’s update, the firm said this would allow it to become debt free with a robust cash position for at least 12 months when considering current business costs and operational plans.
The passing of all the resolutions at Friday’s vote will also see current chief executive Roger Murphy and, in due course, executive director Matt Wood step down from the firm’s board. They will be replaced by Andrew Bell, who will take on the role of executive chairman, and Paul Johnson, who will become executive director.
Bell will be well known to AIM investors as the chief executive and chairman of Red Rock Resources (LSE:RRR) and the non-executive director of Regency Mines (LSE:RGM). He is also a non-executive director at ASX-listed Jupiter Mines and has formerly held senior roles at firms like Star Striker and Greatland Gold (LSE:GGP).
Johnson will also be a familiar name to many in the market as the former chief executive of Metal Tiger (LSE:MTR), Metal NRG (NEX:MNRG), and China Africa Resources. He has also been chairman of ECR Minerals (LSE:ECR) and non-executive director of Greatland Gold (LSE:GGP) and Thor Mining (LSE:THR). He is currently chief executive of Value Generation Limited, a family investment and advisory company focused on the natural resource and related fintech sectors.
As well as joining African Battery’s board, both Bell and Johnson will each subscribe to £50,000 worth of shares in the company’s placing. On top of this, Red Rock will subscribe to an additional £100,000 worth of shares.
Following their appointment, the pair will lead a strategic and operational review of the business. This follows its suspension in December last year after it was unable to secure equity finance from its largest shareholders on any terms. At this time, the business said it would be at risk of being unable to continue to trade as a going concern if it could not reach a satisfactory settlement with its creditors.
Now that it has reached a solution, African Battery has carried out a programme of core cost review and has reduced its corporate plc costs to minimal levels. It has also changed its board incentivisation rules, to ensure that all payments are reflective of the cash position of the company and performance-based. It will publish figures on its website for full transparency.
Finally, the business will also undertake a more thorough strategic and operational review of existing company interests and target exploration resources in a prioritised manner. Following this, it will develop a strategic and operational plan. This will see management identify, review, and, if appropriate, acquire new opportunities to complement and diversify its existing business interests. This could include the potential acquisition of interests within Africa or new territories in both battery metals and other commodity categories.
Finally, following the resolution of the meeting, African Battery will now appoint SI Capital as its joint broker alongside SP Angel.
African Battery aims to become a significant explorer, developer and ultimately miner of battery metals, specifically cobalt, lithium, copper and nickel. To this end, its strategy is to identify highly prospective opportunities at various stages of development in proven jurisdictions that it can either acquire or farm into,
Author: Daniel Flynn
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