Gindalbie Metals Ltd's biggest shareholder has taken legal action to block the sale of 32 million shares, or more than six per cent of its issued capital, that is caught up in the collapse of Melbourne stockbroking firm Opes Prime.
Gindalbie Metals Ltd's biggest shareholder has won an injunction to block until at least April 10 the sale of 32 million shares, or more than six per cent of its issued capital, that is caught up in the collapse of Melbourne stockbroking firm Opes Prime.
Gindalbie is one of more than a dozen Western Australian companies facing the possibility of large lines of stock being dumped on the market, after shareholders lost control of their stock via margin lending deals with Opes.
In Gindalbie's case, its largest shareholder, Malaysian company Melewar Steel Ventures Ltd, has a portion of its shareholding subject to an equity finance contract with Opes Prime, which has had a Receiver-Manager appointed.
Melewar's lawyers, Slater & Gordon, have advised Gindalbie that an injunction has been placed on the ANZ Bank and the Receiver - Manager restricting the sale of approximately 32 million shares the subject of dispute with Melewar.
In a statement released this afternoon, Gindalbie said the injunction will stay in place until 4.00pm on 10 April 2008.
Earlier today, Gindalbie said in a separate statement that it had been actively facilitating interested parties to acquire the 32 million shares and has received strong demand.
It said it had expected to affect an orderly sale of those shares to a number of major institutional investors.
Gindalbie's latest statement is below:
Gindalbie Metals Limited (ASX: GBG - "Gindalbie") wishes to provide the market with a further update regarding
the shareholding of a substantial shareholder, Melewar Steel Ventures Ltd (Melewar).
As previously advised to the market, Melewar has a portion of its shareholding subject to an equity finance
contract with Opes Prime Stockbroking, which has had a Receiver-Manager appointed.
Melewar's lawyers, Slater & Gordon, have this afternoon confirmed that an injunction has been placed on ANZ
Nominees Limited, Australia and New Zealand Banking Group Limited and Opes Prime Stock Broking Limited
restricting the sale of approximately 32 million shares the subject of dispute with Melewar. The injunction is in
place until 4.00pm on 10 April 2008 (EST).
Gindalbie's first statement is pasted below:
Gindalbie Metals Limited is pleased to provide an update regarding the shareholding of a substantial shareholder, Melewar Steel Ventures Ltd (Melewar), which has a portion of its shareholding subject to an equity finance contract with Opes Prime Stockbroking, which has had a Receiver-Manager appointed.
Under the terms of Melewar's equity finance contract with Opes, we understand that the Receiver believes it has the right to sell those shares and it is currently exercising those rights.
Gindalbie has been informed by the Receiver that approximately 32 million Gindalbie shares, representing 6.2% of the Company's issued capital previously held by Melewar, are in the hands of three stockbroking firms, Goldman Sachs JBWere, Merrill Lynch and Dresdner, which have instructions from the Opes Receiver to sell the stock.
The ownership of a further 0.6% remains unclear and Melewar is considering its rights in respect of its position regarding the equity finance contract with Opes Prime Stockbroking.
Gindalbie has been actively facilitating interested parties to acquire all of those shares and has received strong demand. Subsequently, the Company believes the firms acting for the Opes Receivers will be able to affect an orderly sale of those shares to a number of major institutional investors.
Melewar, which has been a substantial shareholder of Gindalbie since 2004, still holds a 7.6% stake in the Company which is not subject to the facility and has indicated its intention to retain those shares.
Gindalbie's Chairman, Mr George Jones, said the Company continued to value its relationship with Melewar and would offer what support it could in respect of this issue.
"This has been an unfortunate event involving one of our substantial shareholders," he said. "While this has been a market distraction I am pleased with the substantial interest that has been evident to acquire any available shares.
"These events have not distracted Gindalbie from its key focus of pursuing the development of the Karara Iron Ore Project, which we think is substantially undervalued by the market in relation to the progress we have made.
The development of our world-class iron ore mine at Karara is effectively fully funded through our Chinese joint venture partner Ansteel, which also has offtake arrangements for all of the project's iron ore products.
We also have infrastructure solutions in place covering rail, port and power and we are progressing through the environmental approvals process."
