West Perth-based gas explorer Westralian Gas and Power Ltd will scale back the number of shares applied for under its share purchase plan after shareholders subscribed for 6.5 million more shares than were on offer.
West Perth-based gas explorer Westralian Gas and Power Ltd will scale back the number of shares applied for under its share purchase plan after shareholders subscribed for 6.5 million more shares than were on offer.
The company had offered 17.2 million shares to its investors, being limited to that number by the Australian Stock Exchange's Listing rule 7.2, stating that an issue of securities does not require shareholder approval under an SPP if the number issued is under 30 per cent.
After receiving applications for 23.7 million shares, the company announced it would scale back the number issued on a pro rata basis instead of seeking shareholder approval.
The company estimates the number of shares issued to individuals will be reduced to around 73 per cent of the total requested.
The full text of a company announcement is pasted below
The directors of Westralian Gas and Power Limited ("WGP") wish to advise that the Company has had an unexpected strong response to the Share Purchase Plan ("SPP"), with a high number of applications on the day of closing, Friday 12 October 2007.
Under ASX Listing Rule 7.1 a company must not issue or agree to issue securities representing more than 15% of the number of fully paid ordinary securities on issue for the preceding 12 month period without shareholder approval. ASX Listing Rule 7.2 provides exceptions to ASX Listing Rule 7.1.
ASX Listing Rule 7.2 (exception 15) states that an issue of securities does not require shareholder approval under a share purchase plan if the number of securities issued is not more than 30% of the number of fully paid ordinary securities already on issue ("30% Rule").
The 30% Rule limits the number of shares available to the Company for issue under the WGP SPP to 17,217,750 shares. Approximately, 23,678,000 shares have been applied for under the SPP.
The Board has determined that it will scale back the number of shares issued against each valid application received, on a pro rata basis, to issue an amount of shares within the 30% Rule, as opposed to undertaking the timely and more expensive process of obtaining shareholder approval to issue the full amount of the shares applied for under the SPP.
Based on preliminary calculations the number of shares issued will be reduced to approximately 73% of the number of shares applied for. For example, a $5,000 application for 43,479 shares is likely to be reduced to an issue of approximately 32,000 shares. A refund cheque for the amount of the excess (without interest) will be provided to the applicants once processing is completed by the share registry.
If as a result of the scaling back, you do not wish to participate in the SPP then confirm this in writing and request a full refund of you application monies before 5pm WST Monday 22 October 2007. Please communicate this to the share registry. Correspondence should be marked for the attention of Yvonne Cecil at Computershare Perth, GPO Box D182 Perth WA 6840 or by facsimile on 08 9323 2033.
The final amount raised under the SPP is now expected to be announced in the week commencing Monday 22 October 2007, once the scaling back is processed and all applications finalised. Shares issued under the SPP are still expected to be quoted on the ASX later in the week commencing Monday 22 October 2007.
