ERA capital raise in limbo as shareholders appeal Takeover Panel decision
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The news: An application has been made to the Takeovers Panel to review its decision not to delay Energy Resources Australia’s (ERA’s) capital raise.
The context: Due to uncertainties arising from the review application, ERA has announced that it will need to revise the timeline for its capital raise.
The application was made by ERA shareholders Zentree Investments and Pack & Co who hold 3.04% and 8.82% in the company, respectively. The had originally sought interim orders from the Takeovers Panel to delay the $880 million capital raise proposed by majority holder Rio Tinto.
If no other shareholders participate in the capital raise, Rio Tinto’s voting power in ERA could increase to as much as 99.25%. This would allow Rio to proceed with the compulsory acquisition of all remaining ERA shares.
On Wednesday, the original application was denied as the Takeovers Panel believed ERA’s independent board committee took appropriate steps to try and mitigate the potential control effect of an equity raise.
The source: ASX announcement
