TIDMAZO
RNS Number : 3559T
Azonto Petroleum Ltd
17 July 2015
AZONTO PETROLEUM LTD
ACn 117 227 086
NOTICE OF GENERAL MEETING
TIME: 10:00 WST
DATE: 17 August 2015
PLACE: Steinepreis Paganin, Level 4, The Read Buildings, 16
Milligan Street, Perth, WA 6000
This Notice of Meeting should be read in its entirety. If
Shareholders are in doubt as to how they should vote, they should
seek advice from their professional advisers prior to voting.
Should you wish to discuss the matters in this Notice of Meeting
please do not hesitate to contact the Company Secretary on (+61 8)
9211 5000.
CONTENTS PAGE
Business of the Meeting (setting out the proposed
resolutions)
3
Explanatory Statement (explaining the proposed resolutions)
9
Glossary 25
Schedule 1 - Pro Forma Balance Sheet 27
Proxy Form 29
important information
TIME AND PLACE OF MEETING
Notice is given that the meeting of the Shareholders to which
this Notice of Meeting relates will be held at 10:00 WST on 17(th)
August 2015 at:
Steinepreis Paganin, Level 4, The Read Buildings, 16 Milligan
Street, Perth, WA 6000
YOUR VOTE IS IMPORTANT
The business of the Meeting affects your shareholding and your
vote is important.
VOTING ELIGIBILITY
The Directors have determined pursuant to Regulation 7.11.37 of
the Corporations Regulations 2001 (Cth) that the persons eligible
to vote at the Meeting are those who are registered Shareholders at
10.00 (WST) on 15 August 2015.
VOTING IN PERSON
To vote in person, attend the Meeting at the time, date and
place set out above.
VOTING BY PROXY
To vote by proxy, please complete and sign the enclosed Proxy
Form and return by the time and in accordance with the instructions
set out on the Proxy Form.
In accordance with section 249L of the Corporations Act,
Shareholders are advised that:
-- each Shareholder has a right to appoint a proxy;
-- the proxy need not be a Shareholder of the Company; and
-- a Shareholder who is entitled to cast 2 or more votes may
appoint 2 proxies and may specify the proportion or number of votes
each proxy is appointed to exercise. If the member appoints 2
proxies and the appointment does not specify the proportion or
number of the member's votes, then in accordance with section
249X(3) of the Corporations Act, each proxy may exercise one-half
of the votes.
Shareholders and their proxies should be aware that changes to
the Corporations Act made in 2011 mean that:
-- if proxy holders vote, they must cast all directed proxies as directed; and
-- any directed proxies which are not voted will automatically
default to the Chair, who must vote the proxies as directed.
Further details on these changes are set out below.
Proxy vote if appointment specifies way to vote
Section 250BB(1) of the Corporations Act provides that an
appointment of a proxy may specify the way the proxy is to vote on
a particular resolution and, if it does:
-- the proxy need not vote on a show of hands, but if the proxy
does so, the proxy must vote that way (ie as directed); and
-- if the proxy has 2 or more appointments that specify
different ways to vote on the resolution, the proxy must not vote
on a show of hands; and
-- if the proxy is the chair of the meeting at which the
resolution is voted on, the proxy must vote on a poll, and must
vote that way (ie as directed); and
-- if the proxy is not the chair, the proxy need not vote on the
poll, but if the proxy does so, the proxy must vote that way (ie as
directed).
Transfer of non-chair proxy to chair in certain
circumstances
Section 250BC of the Corporations Act provides that, if:
-- an appointment of a proxy specifies the way the proxy is to
vote on a particular resolution at a meeting of the Company's
members; and
-- the appointed proxy is not the chair of the meeting; and
-- at the meeting, a poll is duly demanded on the resolution; and
-- either of the following applies:
Ø the proxy is not recorded as attending the meeting; or
Ø the proxy does not vote on the resolution,
the chair of the meeting is taken, before voting on the
resolution closes, to have been appointed as the proxy for the
purposes of voting on the resolution at the meeting.
Evercore Partners International LLP (Evercore), which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting as financial adviser exclusively for
the Company and no one else in connection with the disposal of the
Company's main undertaking and/or other matters referred to in this
document and will not regard any other person as its client in
relation to the matters described herein and will not be
responsible to anyone other than the Company for providing the
protections afforded to clients of Evercore, nor for providing
advice in relation to the disposal or any matter or arrangement
referred to in this document.
business of the meeting
AGENDA
1. Resolution 1 - Disposal of MAIN UNDERTAKING
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, for the purposes of ASX Listing Rule 11.2, AIM Rule 15
and for all other purposes, approval is given for the disposal by
the Company of its main undertaking, being its interest in the
share capital of Vioco Petroleum Limited and wellhead drilling
equipment in Côte d'Ivoire on the terms and conditions set out in
the Explanatory Statement (the "Disposal")."
Voting Exclusion: The Company will disregard any votes cast on
this Resolution by any person who might obtain a benefit, except a
benefit solely in the capacity of a holder of ordinary securities,
if the Resolution is passed and any associates of those persons.
However, the Company need not disregard a vote if it is cast by a
person as a proxy for a person who is entitled to vote, in
accordance with the directions on the Proxy Form, or, it is cast by
the person chairing the meeting as proxy for a person who is
entitled to vote, in accordance with a direction on the Proxy Form
to vote as the proxy decides.
2. RESOLUTION 2 - ADOPTION OF INVESTING POLICY
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, subject to the passing of Resolution 1, the Investing
Policy (as set out in the Explanatory Statement) be and is hereby
approved and the Directors be and are hereby authorised to take all
such steps as they may consider necessary or desirable to implement
the same."
3. Resolution 3 - Issue of shares in lieu of FEeS - andrew barTlett
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, subject to the passing of Resolution 1 and completion of
the Vioco Disposal, for the purposes of ASX Listing Rule 10.11 and
for all other purposes, approval is given for the Company to issue
$57,146 worth of Shares to Andrew Bartlett (or his nominee) (being
120% of deferred director fees owed to him to 29 May 2015, the date
he resigned) on the terms and conditions set out in the Explanatory
Statement."
Important Note: If Shareholders do not approve Resolution 3, the
Company intends to pay Andrew Bartlett his deferred director fees
to 29 May 2015, totalling $47,622, if and when sale proceeds are
received from the Vioco Disposal.
Voting Exclusion Statement: The Company will disregard any votes
cast on this Resolution by Andrew Bartlett (or his nominee) and any
of his associates. However, the Company need not disregard a vote
if it is cast by a person as a proxy for a person who is entitled
to vote, in accordance with the directions on the Proxy Form, or,
it is cast by the person chairing the meeting as proxy for a person
who is entitled to vote, in accordance with a direction on the
Proxy Form to vote as the proxy decides.
Voting Prohibition Statement:
A person appointed as a proxy must not vote, on the basis of
that appointment, on this Resolution if:
(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.
However, the above prohibition does not apply if:
(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise
the proxy even though this Resolution is connected directly or
indirectly with remuneration of a member of the Key Management
Personnel.
4. Resolution 4 - Issue of shares in lieu of FEeS - andrew SINCLAIR
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, subject to the passing of Resolution 1 and completion of
the Vioco Disposal, for the purposes of ASX Listing Rule 10.11 and
for all other purposes, approval is given for the Company to issue
$58,500 worth of Shares to Andrew Sinclair (or his nominee) (being
120% of deferred director fees owed to him to 30 June 2015) on the
terms and conditions set out in the Explanatory Statement."
Important Note: If Shareholders do not approve Resolution 4, the
Company intends to pay Andrew Sinclair his deferred director fees
to 30 June 2015, totalling $48,750, if and when sale proceeds are
received from the Vioco Disposal.
Voting Exclusion Statement: The Company will disregard any votes
cast on this Resolution by Andrew Sinclair (or his nominee) and any
of his associates. However, the Company need not disregard a vote
if it is cast by a person as a proxy for a person who is entitled
to vote, in accordance with the directions on the Proxy Form, or,
it is cast by the person chairing the meeting as proxy for a person
who is entitled to vote, in accordance with a direction on the
Proxy Form to vote as the proxy decides.
Voting Prohibition Statement:
A person appointed as a proxy must not vote, on the basis of
that appointment, on this Resolution if:
(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.
However, the above prohibition does not apply if:
(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise
the proxy even though this Resolution is connected directly or
indirectly with remuneration of a member of the Key Management
Personnel.
5. Resolution 5 - Issue of shares in lieu of FEeS - NEIL HACKETT
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, subject to the passing of Resolution 1 and completion of
the Vioco Disposal, for the purposes of ASX Listing Rule 10.11 and
for all other purposes, approval is given for the Company to issue
$45,000 worth of Shares to Neil Hackett (or his nominee) (being
120% of deferred director fees owed to him to 30 June 2015) on the
terms and conditions set out in the Explanatory Statement."
Important Note: If Shareholders do not approve Resolution 5, the
Company intends to pay Neil Hackett his deferred director fees to
30 June 2015, totalling $37,500, if and when sale proceeds are
received from the Vioco Disposal.
Voting Exclusion Statement: The Company will disregard any votes
cast on this Resolution by Neil Hackett (or his nominee) and any of
his associates. However, the Company need not disregard a vote if
it is cast by a person as a proxy for a person who is entitled to
vote, in accordance with the directions on the Proxy Form, or, it
is cast by the person chairing the meeting as proxy for a person
who is entitled to vote, in accordance with a direction on the
Proxy Form to vote as the proxy decides.
Voting Prohibition Statement:
A person appointed as a proxy must not vote, on the basis of
that appointment, on this Resolution if:
(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.
However, the above prohibition does not apply if:
(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise
the proxy even though this Resolution is connected directly or
indirectly with remuneration of a member of the Key Management
Personnel.
6. Resolution 6 - Issue of shares in lieu of salary - GREGORY STOUPNITZKY
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, subject to the passing of Resolution 1 and completion of
the Vioco Disposal, for the purposes of ASX Listing Rule 10.11 and
for all other purposes, approval is given for the Company to issue
GBP24,000 worth of Shares to Gregory Stoupnitzky (or his nominee)
(being 120% of deferred salary owed to him to 30 June 2015) on the
terms and conditions set out in the Explanatory Statement."
Important Note: If Shareholders do not approve Resolution 6, the
Company intends to pay Gregory Stoupnitzky 120% of his deferred
salary and director fees to 30 June 2015, totalling GBP24,000, if
and when sale proceeds are received from the Vioco Disposal.
Voting Exclusion Statement: The Company will disregard any votes
cast on this Resolution by Gregory Stoupnitzky (or his nominee) and
any of his associates. However, the Company need not disregard a
vote if it is cast by a person as a proxy for a person who is
entitled to vote, in accordance with the directions on the Proxy
Form, or, it is cast by the person chairing the meeting as proxy
for a person who is entitled to vote, in accordance with a
direction on the Proxy Form to vote as the proxy decides.
Voting Prohibition Statement:
A person appointed as a proxy must not vote, on the basis of
that appointment, on this Resolution if:
(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.
However, the above prohibition does not apply if:
(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise
the proxy even though this Resolution is connected directly or
indirectly with remuneration of a member of the Key Management
Personnel.
7. Resolution 7 - Issue of SHARES IN lieu of salary - gert-Jan SMULDERS
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, subject to the passing of Resolution 1 and completion of
the Vioco Disposal, for the purposes of ASX Listing Rule 7.1 and
for all other purposes, approval is given for the Company to issue
GBP10,500 worth of Shares to Gert-Jan Smulders (or his nominee)
(being 120% of deferred salary owed to him to 30 June 2015) on the
terms and conditions set out in the Explanatory Statement."
Important Note: If Shareholders do not approve Resolution 7, the
Company intends to pay Gert-Jan Smulders 120% of his deferred
salary to 30 June 2015, totalling GBP10,500, if and when sale
proceeds are received from the Vioco Disposal.
Voting Exclusion: The Company will disregard any votes cast on
this Resolution by any person who may participate in the proposed
issue and a person who might obtain a benefit, except a benefit
solely in the capacity of a holder of ordinary securities, if the
Resolution is passed and any associates of those persons. However,
the Company need not disregard a vote if it is cast by a person as
a proxy for a person who is entitled to vote, in accordance with
the directions on the Proxy Form, or, it is cast by the person
chairing the meeting as proxy for a person who is entitled to vote,
in accordance with a direction on the Proxy Form to vote as the
proxy decides.
8. Resolution 8 - Issue of SHARES IN lieu of salary - JEFF DURKIN
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, subject to the passing of Resolution 1 and completion of
the Vioco Disposal, for the purposes of ASX Listing Rule 7.1 and
for all other purposes, approval is given for the Company to issue
GBP10,500 worth of Shares to Jeff Durkin (or his nominee) (being
120% of deferred salary owed to him to 30 June 2015) on the terms
and conditions set out in the Explanatory Statement."
Important Note: If Shareholders do not approve Resolution 8, the
Company intends to pay Jeff Durkin 120% of his deferred salary to
30 June 2015, totalling GBP10,500, if and when sale proceeds are
received from the Vioco Disposal.
Voting Exclusion: The Company will disregard any votes cast on
this Resolution by any person who may participate in the proposed
issue and a person who might obtain a benefit, except a benefit
solely in the capacity of a holder of ordinary securities, if the
Resolution is passed and any associates of those persons. However,
the Company need not disregard a vote if it is cast by a person as
a proxy for a person who is entitled to vote, in accordance with
the directions on the Proxy Form, or, it is cast by the person
chairing the meeting as proxy for a person who is entitled to vote,
in accordance with a direction on the Proxy Form to vote as the
proxy decides.
9. Resolution 9 - Issue of Performance RIGHTs to GREGORY STOUPNITZKY
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, subject to the passing of Resolution 1 and completion of
the Vioco Disposal, for the purposes of ASX Listing Rule 10.14 and
for all other purposes, approval is given for the Company to issue
10,412,088 Performance Rights to Gregory Stoupnitzky (or his
nominee) on the terms and conditions set out in the Explanatory
Statement."
ASX Voting Exclusion: The Company will disregard any votes cast
on this Resolution by Gregory Stoupnitzky (or his nominee) and any
of his associates. However, the Company need not disregard a vote
if it is cast by a person as a proxy for a person who is entitled
to vote, in accordance with the directions on the Proxy Form, or,
it is cast by the person chairing the meeting as proxy for a person
who is entitled to vote, in accordance with a direction on the
Proxy Form to vote as the proxy decides.
Voting Prohibition Statement:
A person appointed as a proxy must not vote, on the basis of
that appointment, on this Resolution if:
(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.
However, the above prohibition does not apply if:
(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise
the proxy even though this Resolution is connected directly or
indirectly with remuneration of a member of the Key Management
Personnel.
10. Resolution 10 - Re-election of director - glenn whiddon
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, for the purpose of clause 13.4 of the Constitution, ASX
Listing Rule 14.4 and for all other purposes, Glenn Whiddon, a
Director who was appointed as an additional Director on 2 June
2015, retires, and being eligible and having consented to act, is
elected as a Director."
11. RESOLUTION 11 - Section 195 Approval
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, subject to the passing of Resolutions 3 to 9, for the
purposes of Section 195(4) of the Corporations Act and for all
other purposes, Shareholders approve and authorise the Company to
complete the transactions as contemplated in Resolutions 3 to 9 in
this Notice of Meeting."
DATED: 17 July 2015
BY ORDER OF THE BOARD
Neil hackett
Company secretary
EXPLANATORY STATEMENT
This Explanatory Statement has been prepared to provide
information which the Directors believe to be material to
Shareholders in deciding whether or not to pass the Resolutions
which are the subject of the business of the Meeting.
1. Resolution 1 - Disposal of INTEREST IN the share capital of
Vioco Petroleum Limited and wellhead drilling equipment in Côte
d'Ivoire
1.1 Background
On 8 July 2015, the Company announced to ASX that the Company's
subsidiary, Azonto Petroleum Holdings Limited (the Vendor), had
entered into a sale and purchase agreement (the Agreement) for the
sale of the Vendor's shareholding in Vioco Petroleum Limited
(Vioco) and wellhead drilling equipment in Côte d'Ivoire to Vitol
E&P Ltd (the Purchaser) (the sale of the shares in Vioco being
the Vioco Disposal and, together with the sale of the drilling
equipment, the Disposal).
The Vendor holds 35% of the shares in Vioco, which holds an 87%
working interest in, and is operator of, the CI-202 Block in Côte
d'Ivoire, within which is located the Gazelle project. The
Purchaser owns the remaining 65% of the shares in Vioco. A summary
of the key terms of the Agreement are set out in Section 1.2
below.
The Company's interest in CI-202 Block is its main
undertaking.
ASX Listing Rule 11.2 provides that, where a company proposes to
make a significant change to the nature or scale of its activities
which involves the disposal of its main undertaking, it must first
obtain the approval of its shareholders.
The Disposal will constitute a fundamental change of business of
the Company under Rule 15 of the AIM Rules and will therefore
require the approval of the Shareholders.
Resolution 1 seeks Shareholder approval for the Disposal.
1.2 Summary of Agreement
The key terms of the Agreement are as follows:
(a) (Sale and Purchase): The Vendor agrees to sell to the
Purchaser its holding of 35% of the shares in Vioco and wellhead
drilling equipment in Côte d'Ivoire owned by the Vendor.
(b) (Consideration for sale of shares in Vioco): In
consideration for the sale of the shares in Vioco, the Purchaser
will pay to the Vendor:
(i) US$4,000,000 less:
(A) the aggregate amount of the pre-existing net liabilities of
Vioco for the period prior to 7 November 2013 when the Purchaser
acquired its existing 65% shareholding in Vioco (Pre-existing
Liabilities) and 35% of a claim made against Vioco by the Cote
d'Ivoire Ministry of Finance in relation to withholding tax with
respect to the period 2011 to 2013 (WHT Claim) as agreed in writing
by the parties, if such aggregate amount is less than four hundred
thousand United States Dollars (US$400,000); or
(B) four hundred thousand United States Dollars (US$400,000) if
the aggregate amount of the Pre-existing Liabilities and 35% of the
WHT Claim as agreed by the parties in writing, acting reasonably,
exceeds this amount, or if the parties fail to agree the
Pre-existing Liabilities and/or the WHT Claim; and
(ii) upon the occurrence of a hydrocarbon discovery (as defined
below), US$2,000,000, payable within 10 business days of a
Hydrocarbon Discovery.
Net liabilities for the purpose of determining the consideration
as described above will be calculated by deducting specified
liabilities (excluding the Petroci JV Administration Claim) from
assets of Vioco which relate to the CI-202 Block.
A hydrocarbon discovery means a discovery of hydrocarbons in the
Cl-202 Block by Vioco as a result of the exploration well drilled
in the initial exploration period, as required by Article 4.2 of
the Petroleum Production Sharing Contract relating to Block CI-202
(PSC), for which Vioco has submitted a notice to the Cote d'Ivoire
Government pursuant to Article 11.1 of the PSC and in relation to
which either:
(i) the Purchaser has confirmed such discovery as being
potentially commercial in writing to the Vendor, or
(ii) Vioco has made an application for an exclusive appraisal
authorisation from the Cote d'Ivoire Government pursuant to Article
11.2 of the PSC, or
(iii) Vioco has elected, pursuant to Article 11.8 of the PSC,
not to make an application for an exclusive appraisal authorisation
from the Cote d'Ivoire Government as aforesaid.
(c) (Consideration for sale of wellhead drilling equipment): In
consideration for the sale of the wellhead drilling equipment, the
Purchaser will pay to the Vendor US$1,100,000 less the value
ascribed to any wellhead drilling equipment which is removed or
damaged prior to completion.
(d) (Conditions precedent to sale of shares in Vioco): The sale
of shares in Vioco is subject to satisfaction of certain conditions
precedent prior to 21 August 2015, including:
(i) the Company obtaining shareholder approval for the Disposal
as required under the listing rules of ASX and AIM;
(ii) the Purchaser confirming in writing that it is reasonably
satisfied that the PSC has not been revoked and that it is unlikely
that it will be revoked (and such remaining the case up to
completion of the Vioco Disposal);
(iii) the Purchaser confirming in writing to the Vendor (but
without prejudice to the Purchaser's or the Vioco's rights against
any person other than the Vendor) that it is satisfied that the
aggregate amount of the Pre-existing Liabilities and 35% of the WHT
Claim does not exceed four hundred thousand United States Dollars
(US$400,000);
(iv) the Purchaser being satisfied with the terms agreed in
principle between Petroci and the Vendor (on behalf of Vioco) in
respect of the settlement of the Petroci JV Administration Claim
and the Petroci P3 Well Audit Claim and the execution by Vioco of a
formal legal agreement incorporating such terms;
(v) the Purchaser being satisfied on reasonable grounds that the
WHT Claim does not exceed five hundred and seventy one thousand
United Stated Dollars (US$571,000);
(vi) the Purchaser being satisfied on reasonable grounds that
the Vendor has settled directly the claim from Vantage Drilling
Company against Vioco in respect of the outstanding Sapphire rig
payment without further recourse against Vioco, the Vendor or the
Purchaser; and
(vii) no material breach of any warranty or term of the Agreement by the Vendor.
(e) (Conditions precedent to sale of wellhead drilling
equipment): The sale of the wellhead drilling equipment is subject
to satisfaction of certain conditions precedent prior to 7 November
2015, including:
(i) completion of the sale of shares in Vioco;
(ii) Vioco having made a commitment, on or before 7 October 2015
(or such later date as agreed in accordance with the PSC), to drill
a new exploration well pursuant to the PSC; and
(iii) no material breach of any wellhead equipment warranty or a
term of the Agreement by the Vendor.
(f) (Completion of sale of shares in Vioco): Completion of the
sale of shares in Vioco will occur not more than five business days
after satisfaction of the conditions precedent, at which the Vendor
will deliver to the Purchaser certain items including share
transfers in respect of its shares in Vioco, deeds of termination
in respect of various joint venture agreements including the
shareholders' agreement relating to Vioco, parent guarantee and the
original sale and purchase agreement between the Vendor and the
Purchaser all dated 7 November 2013 (as amended), and the
resolutions of directors and shareholders of the Vendor to approve
the transaction, and the Purchaser will pay the consideration price
to the Vendor.
(g) (Completion of sale of wellhead drilling equipment):
Completion of the sale of wellhead drilling equipment will occur
not more than five business days after satisfaction of the
conditions precedent, at which the Purchaser will take delivery of
the wellhead drilling equipment at Vioco's yards at Abidjan, Côte
d'Ivoire, and the Purchaser will pay the consideration price to the
Vendor.
(h) (Other terms): The Agreement contains other terms considered
standard for an agreement of this nature, including warranties as
to title to the assets to be sold, satisfactory quality of the
wellhead drilling equipment and the solvency of Vioco.
(i) (Governing law): The Agreement is governed by the laws of England.
1.3 Indicative timetable
Subject to the requirements of the listing rules of ASX and AIM,
the Company anticipates completion of the Disposal will occur in
accordance with the following timetable:
Event Date
------------------------------ ------------------
ASX announcement of Disposal 8 July 2015
------------------------------ ------------------
General Meeting to approve 17 August 2015
Disposal
------------------------------ ------------------
Completion of sale of shares Anticipated 21
in Vioco August 2015
------------------------------ ------------------
Completion of sale of wellhead Anticipated 15
drilling equipment October 2015
------------------------------ ------------------
1.4 Financial effect of the Disposal on the Company
The impact of the Disposal on the Company's balance sheet is set
out in the pro forma balance sheet contained in Schedule 1.
There will be no impact on the capital structure of the
Company.
1.5 Reasons for the Disposal
The Directors believe that following an assessment of the
advantages and disadvantages disclosed below the Disposal is in the
best interests of the Company.
Advantages
The Directors believe that the following non-exhaustive list of
advantages may be relevant to a Shareholder's decision on how to
vote on the proposed Disposal:
(a) the Disposal will allow the Company to realise value for its
interest in Block CI-202 following a challenging period of cost
overruns, delays to approvals and financing arrangements and the
wider context of an oil and gas market which has experienced
significant deterioration over the past year;
(b) the Disposal will allow the Company to exit its ongoing
expenditure obligations under the PSC, which would otherwise
require the Company to spend substantial funds on exploration
drilling over the next 18 months. These obligations, which would
need to be committed to from October 2015, constitute expenditure
which the Company currently does not have the funds to meet and
which the Board feels there is a very high risk the Company will
not be able to obtain before October 2015; and
(c) the Disposal will enable the Company to consider alternative
asset acquisitions that the Directors believe will add value to
Shareholders.
Disadvantages
The Directors believe that the following non-exhaustive list of
disadvantages may be relevant to a Shareholder's decision on how to
vote on the proposed Disposal:
(a) the Company will not be able to participate in or derive any
future benefit or profits from Block CI-202, if any, should any
asset within Block CI-202 be developed to production other than the
potential contingent payments referred to in sections 1.2(b)(ii)
and 1.2(c) of this Explanatory Statement;
(b) the Disposal involves the Company selling its principal
asset which comprises substantially all of the Company's value.
This may not be consistent with the investment objectives of all
Shareholders; and
(c) there is a risk that the Company may not be able to locate
and complete the acquisition of other suitable investment
opportunities within a reasonable time.
1.6 Future activities and direction of the Company upon completion of the Disposal
The Company's assets following completion of the Disposal will
comprise cash of approximately AUS$8.0 million and receivables of
approximately AUS$1.6 million. Current liabilities will be
approximately AUS$1.85 million, resulting in a net asset position
of approximately AUS$8.1 million as per the pro-forma balance sheet
for 31 May 2015 referred to in paragraph 1.4 of this Explanatory
Statement.
After completion of the Disposal, the directors will consider
other potential investment opportunities that have potential to
generate shareholder return. The investment opportunities may not
be within the resources sector.
The Company is highly likely, as a condition of any future
investment, to be required by the ASX to obtain shareholder
approval for the investment.
In this regard, ASX Guidance Note 12, which provides guidance on
ASX's policy in relation to companies that dispose of their main
undertaking, as will be the case with the Company, provides (at
note 112) that the ASX will generally exercise its discretion to
require a company to obtain shareholder approval for the
acquisition of a new business following a disposal of main
undertaking.
The ASX may also exercise its discretion to require the company
to re-comply with ASX listing requirements.
ASX Guidance Note 12 also provides, at Section 4.7, that the ASX
will generally allow a company to remain as a cash box for up to 6
months after disposing of its main undertaking to give it time to
identify, and make an announcement of its intention to acquire,
another business, failing which ASX usually suspends the company
until such time as an announcement is made.
Given the above, the Company's expectation is that it will,
within 6 months of the Disposal, identify and enter into an
agreement to acquire a new business and have to obtain shareholder
approval to complete the acquisition.
1.7 Director interests and recommendations
The Directors (other than Gregory Stoupnitzky) do not have any
material interest in the outcome of the Resolution other than as a
result of their interest arising solely in the capacity as security
holders.
The Board at its meeting dated March 3(rd) 2015 approved the
payment to Gregory Stoupnitzky of a cash bonus of up to GBP125,000
on completion of the Vioco Disposal as reasonable remuneration for
his extraordinary efforts and contribution to the Company including
his contribution towards achievement of the Disposal. Gregory
Stoupnitzky as such has a material personal interest in the outcome
of the Resolution.
As at the date of this Notice, the Directors have a relevant
interest in the securities of the Company as set out in the
following table:
Director Shares Performance Options
rights(1)
-------------------- ------------- ----------- ------------
Gregory Stoupnitzky 2,333,333 16,253,000 -
-------------------- ------------- ----------- ------------
Neil Hackett 706,667 6,501,179 -
-------------------- ------------- ----------- ------------
Andrew Sinclair 1,963,333 6,501,179 -
-------------------- ------------- ----------- ------------
Glenn Whiddon 28,167,568(2) - 5,000,600(3)
-------------------- ------------- ----------- ------------
Notes:
(1) The Performance Rights are convertible into Shares subject
to the fulfilment of certain performance conditions. Details of the
conditions attaching to the Performance Rights are set out in the
Remuneration Report enclosed in the 2014 Annual Report of the
Company announced to ASX on 29 April 2015.
(2) Mr Whiddon holds 28,167,568 Shares directly in his own name.
The entity 6466 Investments Pty Ltd, which is controlled by Ms Jane
Whiddon, the spouse of Mr Whiddon, holds 56,645,382 Shares. Mr
Whiddon has no relevant interest in the shares held by 6466
Investments Pty Ltd.
(3) Options exercisable at $0.25 each on or before 21 July 2015.
The Board (other than Gregory Stoupnitzky who has a material
personal interest in Resolution 1) has approved the proposal to put
Resolution 1 to Shareholders.
Each of the Directors intends to vote all of their Shares, which
represent a total of 2.86% of the current total shares outstanding,
in favour of Resolution 1.
Over the last few months, the Company and the Board have engaged
in an intense and accelerated effort to secure a strategic solution
that would result either in:
(a) securing additional funds to ensure the further development
of the Company's interests in CI-202 Block; or
(b) a potential sale or merger of the Company or a sale of the Company's assets.
Through this exercise, it has become clear to the Board that,
due to the challenging conditions in the oil and gas sector
currently, including low and volatile oil prices and weak equity
market sentiment on the sector, but also due to the continued
delays and uncertainty with regards to the sanctioning of the
Gazelle Project, there is a high risk that the Company would not be
able to secure further funds or agree one or more alternative
transactions, before its existing cash resources run out.
Specifically, Vioco has requested the Cote d'Ivoire Government's
support to potentially combine Gazelle and Hippo North into an
integrated project which could require the Company to spend
substantial funds on exploration drilling over the next 18 months
at Hippo North, before an integrated Hippo North and Gazelle
Project is potentially sanctioned. Furthermore, the Company would
have to commit to such Hippo North exploration expenditure by
October 2015.
In the event Shareholder approval for the Disposal is not
obtained and completion of the Disposal is unable to occur, there
is a high risk that the Company will not be able to meet its near
to medium term commitments in respect of its interest in Vioco, the
PSC and CI-202 Block, which would in such circumstances lead to the
loss of the Company's interests in the PSC and CI-202 Block.
If Shareholder approval in relation to the Disposal is not
obtained and in the absence of alternatives, the Board could be
forced to seek Shareholder approval, for the Company to be wound-up
and any existing cash remaining in the Company after all its
liabilities have been met to be distributed to the Shareholders.
The Board further notes that under such a scenario, funds available
for return to Shareholders will be substantially less than the
funds available to the Company post completion of the Disposal and
its associated costs.
Therefore, based on the information available, including the
financial advice that the Company has received from Evercore solely
in relation to the Disposal, all of the Directors consider that the
proposed Disposal is in the best interests of the Company and
recommend that Shareholders vote in favour of all of the
Resolutions. In providing its financial advice to the Company,
Evercore has taken into account the commercial assessments of the
Board.
2. Resolution 2 - ADOPTION OF INVESTING POLICY
As set out in Section 1.6 above, after completion of the
Disposal, the Directors will consider other potential investment
opportunities that have potential to generate shareholder return.
The investment opportunities may or may not be within the resources
sector.
The Directors may consider it appropriate that the Company takes
an equity interest in a proposed investment which may range from a
minority position to 100 percent ownership. Proposed investments
may be made in quoted or unquoted securities in companies or
partnerships or assets at any stage of development.
The Board believes that the collective experience of the
Directors together with their network of contacts will assist them
in the identification, evaluation and funding of suitable
investment opportunities.
3. Resolutions 3-6 - Issue of shares to RELATED PARTIES in lieu of salary/FEES
3.1 Background
Given the financial position of the Company, Andrew Bartlett,
Andrew Sinclair, Neil Hackett and Gregory Stoupnitzky, who are (or
were in the last 6 months, in the case of Andrew Bartlett)
Directors of the Company (the Related Parties), agreed to defer
their respective entitlements to salary and director fees as
follows:
(a) in respect of Andrew Bartlett, Andrew Sinclair and Neil
Hackett, from 1 January 2015 until the earlier of resignation or
30(th) June 2015. Andrew Bartlett resigned as a non executive
director of the Company on 29 May 2015; and
(b) in respect of Gregory Stoupnitzky, from 18 January 2015 until 30(th) June 2015,
(each such period being the Deferral Period).
Andrew Sinclair, Neil Hackett and Glenn Whiddon, the current
Non-Executive Directors of the Company, have resolved to reduce
their Director's fees to the amount of AUD$3,000 per month,
commencing 1 July 2015.
The Company has agreed, subject to Shareholder approval, and
completion of the Vioco Disposal, to issue Shares to Andrew
Bartlett, Andrew Sinclair and Neil Hackett in lieu of their
entitlement to salary and director fees for the Deferral Period as
follows:
(a) the issue price of Shares issued will be equal to the 30 day
VWAP for Shares up to completion of the Vioco Disposal (Issue
Price); and
(b) the number of Shares to be issued to a Related Party will be
equal to 120% of the salary and director fees which were deferred
by the Related Party during the Deferral Period, divided by the
Issue Price.
In the event Shareholder approval is not obtained within 60 days
of completion of the Vioco Disposal, the Company will pay Andrew
Bartlett, Andrew Sinclair and Neil Hackett, subject to completion
of the Vioco Disposal, a cash sum equal to only 100% of their
respective deferred director fee amount to 30 June 2015 (being
$47,622 for Andrew Bartlett: $48,750 for Andrew Sinclair and
$37,500 for Neil Hackett).
In the event Shareholder approval is not obtained within 60 days
of completion of the Disposal, the Company will pay to Gregory
Stoupnitzky, subject to completion of the Vioco Disposal, a cash
sum equal to 120% of his deferred salary amount to 30 June
2015.
Resolutions 3-6 seek Shareholder approval for the issue of
Shares (the Related Party Shares) to the Related Parties (or their
respective nominees) in lieu of their entitlement to salary and
director fees for the Deferral Period.
As the Issue Price is based on the 30 day VWAP of Shares, the
Issue Price will not be known at the time of the Meeting.
Therefore, set out below are worked examples of the number of
Related Party Shares that may be issued to the Related Parties
based on issue prices of $0.004, $0.005 and $0.006 (assuming no
further Shares are issued or Options exercised).
Related Party Assumed Issue Deferred Deferred Number of Shares Dilution effect
Price Salary/fees Salary/fees on existing
(GBP)(1) (AUD$)(1) Shareholders(2)
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
Andrew Bartlett $0.004 n/a $57,146 14,286,538 1.22%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
$0.005 n/a $57,146 11,429,230 0.98%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
$0.006 n/a $57,146 9,524,358 0.81%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
Andrew Sinclair $0.004 n/a $58,500 14,625,005 1.25%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
$0.005 n/a $58,500 11,700,004 1.00%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
$0.006 n/a $58,500 9,750,003 0.83%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
Neil Hackett $0.004 n/a $45,000 11,250,000 0.96%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
$0.005 n/a $45,000 9,000,000 0.77%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
$0.006 n/a $45,000 7,500,000 0.64%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
Gregory
Stoupnitzky $0.004 GBP24,000 $49,281 12,320,329 1.05%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
$0.005 GBP24,000 $49,281 9,856,263 0.84%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
$0.006 GBP24,000 $49,281 8,213,552 0.70%
------------------- ------------------ ------------------ ------------------ ----------------- ------------------
Note:
1. Amounts payable in GBP have been converted to AUD using an
AUD:GBP exchange rate of 0.487. All amounts include a 20%
uplift.
2. Assumes that no other Shares are issued under this Notice of
Meeting.
The Company has obtained a waiver of ASX Listing Rule 10.13.5 to
enable the Related Party Shares to have an issue price based on the
above formula rather than stating an exact issue price in this
Notice.
3.2 Chapter 2E of the Corporations Act
For a public company, or an entity that the public company
controls, to give a financial benefit to a related party of the
public company, the public company or entity must:
(a) obtain the approval of the public company's members in the
manner set out in sections 217 to 227 of the Corporations Act;
and
(b) give the benefit within 15 months following such approval,
unless the giving of the financial benefit falls within an
exception set out in sections 210 to 216 of the Corporations
Act.
The grant of Related Party Shares constitutes giving a financial
benefit and each of Andrew Bartlett, Andrew Sinclair, Neil Hackett
and Gregory Stoupnitzky is a related party of the Company by virtue
of being a Director (or, in the case of Andrew Bartlett, a Director
within the last 6 months).
The Directors (other than each of the Related Parties in respect
only of the Resolution which relates to the issue of Related Party
Shares to himself given his material personal interest in the
Resolution) consider that Shareholder approval pursuant to Chapter
2E of the Corporations Act is not required in respect of the issue
of the Related Party Shares because the agreement to issue the
Related Party Shares in lieu of each Related Party's entitlement to
salary during the Deferral Period is considered to be reasonable
remuneration in the circumstances and was negotiated on an arm's
length basis, which each interested Director abstaining from
participation in the vote which related to that Director's issue of
Related Party Shares in lieu of his salary entitlement.
Accordingly, the exception to approval under Chapter 2E provided
by section 211 of the Corporations Act applies to the proposed
issue of the Related Party Shares.
3.3 ASX Listing Rule 10.11
ASX Listing Rule 10.11 requires shareholder approval to be
obtained where an entity issues, or agrees to issue, securities to
a related party, or a person whose relationship with the entity or
a related party is, in ASX's opinion, such that approval should be
obtained unless an exception in ASX Listing Rule 10.12 applies.
As the issue of the Related Party Shares involves the issue of
securities to a related party of the Company, Shareholder approval
pursuant to ASX Listing Rule 10.11 is required unless an exception
applies. It is the view of the Directors that the exceptions set
out in ASX Listing Rule 10.12 do not apply in the current
circumstances.
3.4 Technical Information required by ASX Listing Rule 10.13
Pursuant to and in accordance with ASX Listing Rule 10.13, the
following information is provided in relation to Resolutions
3-6:
(a) the Related Party Shares will be issued to Andrew Bartlett,
Andrew Sinclair, Neil Hackett and Gregory Stoupnitzky (or their
respective nominees) who are related parties of the Company by
virtue of being Directors (or, in the case of Andrew Bartlett, a
Director within the last 6 months);
(b) the issue of the Related Party Shares is subject to and
conditional upon the passing of Resolution 1 and the completion of
the Vioco Disposal;
(c) the maximum number of Related Party Shares to be issued is:
(i) $57,146 worth of Related Party Shares in the case of Andrew Bartlett;
(ii) $58,500 worth of Related Party Shares in the case of Andrew Sinclair;
(iii) $45,000 worth of Related Party Shares in the case of Neil Hackett;
(iv) GBP24,000 worth of Related Party Shares in the case of
Gregory Stoupnitzky (converted into AUD using the GBP:AUD exchange
rate as at the date the Shares are issued);
(d) the issue price of the Related Party Shares will be equal to
the 30 day VWAP of Shares to the completion date of the Vioco
Disposal;
(e) the Related Party Shares will be issued no later than one
month after the date of the Meeting (or such later date to the
extent permitted by any ASX waiver or modification of the ASX
Listing Rules) and it is intended that issue of the Shares will
occur on the same date;
(f) the Related Party Shares will be issued in lieu of each
Related Party's entitlement to receive salary and fees during the
Deferral Period. Accordingly, no funds will be raised; and
(g) the Related Party Shares issued to the Related Parties will
be fully paid ordinary shares in the capital of the Company issued
on the same terms and conditions as the Company's existing
Shares.
Approval pursuant to ASX Listing Rule 7.1 is not required for
the issue of the Related Party Shares as approval is being obtained
under ASX Listing Rule 10.11. Accordingly, the issue of the Related
Party Shares to the Related Parties (or their nominees) will not be
included in the use of the Company's 15% annual placement capacity
pursuant to ASX Listing Rule 7.1.
4. ResolutionS 7-8 - Issue of shares to SENIOR MANAGEMENT in lieu of salary
4.1 General
Given the financial position of the Company, certain senior
managers of the Company (Senior Managers) agreed to defer their
respective entitlement to salary for the period from 1 April 2015
until the 30(th) June 2015.
The Company has agreed, subject to Shareholder approval and
completion of the Vioco Disposal, to issue Shares to the Senior
Managers in lieu of their entitlement to salary in the Deferral
Period as follows:
(a) the issue price of Shares issued will be equal to the 30 day
VWAP for Shares up to completion of the Vioco Disposal, subject to
a floor equal to 80% of the 5 day VWAP for Shares up to the issue
date of the Shares (Issue Price); and
(b) the number of Shares to be issued to a Senior Manager will
be equal to 120% of the salary which was deferred by the Senior
Manager during the Deferral Period, divided by the Issue Price.
In the event Shareholder approval is not obtained within 60 days
of completion of the Vioco Disposal, the Company will pay to the
Senior Managers, subject to completion of the Vioco Disposal, a
cash sum equal to 120% of their respective deferred salary
amount.
Resolutions 7-8 seek Shareholder approval for the issue of
Shares (the Senior Manager Shares) to the Senior Managers (or their
respective nominees) in lieu of their entitlement to salary for the
Deferral Period.
As the Issue Price is based on the 30 day VWAP of Shares, the
Issue Price will not be known at the time of the Meeting.
Therefore, set out below are worked examples of the number of
Senior Manager Shares that may be issued to the Senior Managers
based on issue prices of $0.004, $0.005 and $0.006 (assuming no
further Shares are issued or Options exercised).
Senior Manager Assumed Issue Price Deferred Salary(1) Deferred Salary(1) Number of Shares Dilution effect on existing Shareholders(2)
(GBP) (AUD$)
---------------- -------------------- ------------------- ------------------- ----------------- --------------------------------------------
Jeff Durkin $0.004 GBP10,500 $21,561 5,390,144 0.46%
---------------- -------------------- ------------------- ------------------- ----------------- --------------------------------------------
$0.005 GBP10,500 $21,561 4,312,115 0.37%
---------------- -------------------- ------------------- ------------------- ----------------- --------------------------------------------
$0.006 GBP10,500 $21,561 3,593,429 0.31%
---------------- -------------------- ------------------- ------------------- ----------------- --------------------------------------------
Gert-Jan
Smulders $0.004 GBP10,500 $21,561 5,390,144 0.46%
---------------- -------------------- ------------------- ------------------- ----------------- --------------------------------------------
$0.005 GBP10,500 $21,561 4,312,115 0.37%
---------------- -------------------- ------------------- ------------------- ----------------- --------------------------------------------
$0.006 GBP10,500 $21,561 3,593,429 0.31%
---------------- -------------------- ------------------- ------------------- ----------------- --------------------------------------------
Note:
1. Amounts payable in GBP have been converted to AUD using an
AUD:GBP exchange rate of 0.487 and includes a 20% uplift.
2. Assumes that no other Shares are issued under this Notice of
Meeting.
Shareholder approval for the issue of the Senior Management
Shares is sought under ASX Listing Rule 7.1.
ASX Listing Rule 7.1 provides that a company must not, subject
to specified exceptions, issue or agree to issue more equity
securities during any 12 month period than that amount which
represents 15% of the number of fully paid ordinary securities on
issue at the commencement of that 12 month period.
The effect of Resolutions 7-8 will be to allow the Company to
issue the Senior Manager Shares during the period of three months
after the Meeting (or a longer period, if allowed by ASX), without
using the Company's 15% annual placement capacity.
4.2 Technical information required by ASX Listing Rule 7.1
Pursuant to and in accordance with ASX Listing Rule 7.3, the
following information is provided in relation to Resolutions
7-8:
(a) the Senior Manager Shares will be issued to Gert-Jan
Smulders and Jeff Durkin (or their respective nominees);
(b) the issue of the Senior Manager Shares is subject to and
conditional upon the passing of Resolution 1 and the completion of
the Vioco Disposal;
(c) the entitlement to salary in the Deferral Period and the
number of Senior Manager Shares to be issued to each Senior Manager
is:
(i) GBP10,500 worth of Senior Manager Shares in the case of
Gert-Jan Smulders (converted into AUD using the GBP:AUD exchange
rate as at the date the Shares are issued);
(ii) GBP10,500 worth of Senior Manager Shares in the case of
Jeff Durkin (converted into AUD using the GBP:AUD exchange rate as
at the date the Shares are issued);
(d) the issue price of the Senior Manager Shares will be equal
to the 30 day VWAP of Shares to the completion date of the Vioco
Disposal, subject to a floor equal to 80% of the 5 day VWAP for
Shares up to the issue date of the Shares;
(e) the Senior Manager Shares will be issued no later than three
months after the date of the Meeting (or such later date to the
extent permitted by any ASX waiver or modification of the ASX
Listing Rules) and it is intended that issue of the Senior Manager
Shares will occur on the same date;
(f) the Senior Manager Shares will be issued in lieu of each
Senior Manager's entitlement to receive salary during the Deferral
Period. Accordingly, no funds will be raised; and
(g) the Senior Manager Shares issued to the Senior Managers will
be fully paid ordinary shares in the capital of the Company issued
on the same terms and conditions as the Company's existing
Shares.
5. resolution 9 - issue of PERFORMANCE RIGHTS TO DIRECTOR
5.1 General
The Company has agreed, subject to obtaining Shareholder
approval and completion of the Vioco Disposal, to grant a total of
10,412,088 Performance Rights (Related Party Performance Rights) to
Gregory Stoupnitzky under the Performance Rights Plan on the terms
and conditions set out below.
The Performance Rights will be issued to Gregory Stoupnitzky
upon the completion of the Vioco Disposal. The terms of the
Performance Rights will be equivalent in all respects to the
Performance Rights issued by the Company following Shareholder
approval at the 2013 annual general meeting of the Company.
The purpose of the grant of Related Party Performance Rights to
Gregory Stoupnitzky is to reward the performance of Gregory
Stoupnitzky.
5.2 Chapter 2E of the Corporations Act
A summary of Chapter 2E of the Corporations Act is set out under
Section 3.2 above.
The Directors (other than Gregory Stoupnitzky, who has a
material personal interest in Resolution 9) consider that
Shareholder approval pursuant to Chapter 2E of the Corporations Act
is not required in respect of the grant of Related Party
Performance Rights because the agreement to grant the Related Party
Performance Rights, reached as part of the remuneration package for
Gregory Stoupnitzky, is considered reasonable remuneration in the
circumstances and was negotiated on an arm's length basis.
5.3 ASX Listing Rule 10.14
ASX Listing Rule 10.14 requires shareholder approval to be
obtained where an entity issues, or agrees to issue, securities
under an employee incentive scheme to a director of the entity, an
associate of the director, or a person whose relationship with the
entity, director or associate of the director is, in ASX's opinion,
such that approval should be obtained..
If Resolution 9 is passed, Related Party Performance Rights will
be issued to Gregory Stoupnitzky, a Director of the Company.
Therefore, the Company requires Shareholder approval to issue the
Related Party Performance Rights to Gregory Stoupnitzky.
Approval pursuant to ASX Listing Rule 7.1 is not required in
order to issue the Related Party Performance Rights as approval is
being obtained under ASX Listing Rule 10.14 and Exception 9(b) of
ASX Listing Rule 7.2. The issue of Related Party Performance Rights
to Gregory Stoupnitzky will not be included in the 15% calculation
for the purposes of ASX Listing Rule 7.1.
5.4 Summary of the material terms of the Related Party Performance Rights
It is proposed that the Company issue to Gregory Stoupnitzky two
different tranches of Related Party Performance Rights, Tranches 1
(Tranche 1 Performance Rights) and 2 (Tranche 2 Performance
Rights), as set out in the table in Section 5.5 below, for nil cash
consideration. One third of the Related Party Performance Rights
will be Tranche 1 Performance Rights with the remaining two thirds
being Tranche 2 Performance Rights.
Each Related Party Performance Right will vest and be
exercisable into one Share subject to the satisfaction of certain
performance criteria (Performance Milestones).
The Performance Rights will be issued to Gregory Stoupnitzky
upon the completion of the Vioco Disposal. If the Vioco Disposal
does not occur in accordance with the terms of the Agreement, no
Performance Rights will be issued to Gregory Stoupnitzky.
In the event that the Performance Milestones are not met, the
Related Party Performance Rights will not vest and, as a result, no
new Shares will be issued, provided that unvested Related Party
Performance Rights may nonetheless vest in certain circumstances,
including a change in control of the Company, as provided for by
the Performance Rights Plan. There is nil consideration payable
upon the vesting or exercise of a Related Party Performance
Right.
As started above, the terms of the Performance Rights are
equivalent in all respects to the Performance Rights issued
following Shareholder approval at the 2013 annual general meeting
of the Company.
The Tranche 1 Performance Rights will vest on the achievement of
two strategic milestones on or before 18 December 2017:
(a) all government and partner approvals, offtake, supply and
service contracts, financings and other necessary conditions for
the Gazelle field development project to proceed having been
obtained and agreed and the Rialto Energy Cote d'Ivoire Ltd having
taken the Final Investment Decision to proceed with the project;
and
(b) the first delivery of gas from the Gazelle field to the Cote
d'Ivoire state electricity company (or other agreed purchaser)
having been made under stabilised flow rate conditions (Tranche 1
Vesting Conditions).
In the event not all of the Tranche 1 Vesting Conditions are
satisfied on or before 18 December 2017, the Board may resolve that
a proportion of the Tranche 1 Performance Rights vest based on the
degree to progress towards satisfaction of the Tranche 1 Vesting
Conditions has been achieved.
The Tranche 2 Performance Rights will vest on:
(a) achievement of share price targets (to be calculated based
on the VWAP over the 10 trading days prior to the date of issue) on
or before 18 December 2017 (Share Price Hurdles); and
(b) the Board being satisfied, on or before 18 December 2017,
with the overall financial, strategic and HSE performance of the
Company over that four year period (Final Performance Hurdle).
The Share Price Hurdles are as follows:
(a) 25% of the Tranche 2 Performance Rights will vest (on
satisfaction of the Final Performance Hurdle) if the Company's
Share price reaches $0.05 per Share on or before 18 December
2017;
(b) a further 25% of the Tranche 2 Performance Rights will vest
(on satisfaction of the Final Performance Hurdle) if the Company's
Share price reaches $0.07 per Share on or before 18 December 2017.
Achievement of this milestone will result in 50% of the Tranche 2
Performance Rights vesting on satisfaction of the Final Performance
Hurdle; and
(c) the remaining 50% of the Tranche 2 Performance Rights will
vest (on satisfaction of the Final Performance Hurdle) if the
Company's Share price reaches $0.09 per Share on or before 18
December 2017. Achievement of this milestone will result in 100% of
the Tranche 2 Performance Rights vesting on satisfaction of the
Final Performance Hurdle.
5.5 Information required by the ASX Listing Rules
The following information is provided to satisfy the
requirements of ASX Listing Rule 10.15:
(a) Gregory Stoupnitzky is a related party by virtue of being a Director;
(b) the maximum number of Performance Rights to be granted to
Gregory Stoupnitzky is set out in the table below:
Performance Rights
---------------------------------- -----------------------------------
Director Tranche Tranche Total
1 2
---------------------------------- ---------- ---------- -----------
Gregory Stoupnitzky 3,470,696 6,941,392 10,412,088
---------------------------------- ---------- ---------- -----------
(c) the Performance Rights will be granted to Gregory
Stoupnitzky for nil cash consideration. On achievement of the
applicable vesting conditions set out in Section 5.4 above in
respect of a Performance Right, the Performance Right will vest and
the holder will be entitled to exercise and be issued one Share for
nil issue price. Accordingly, no loans will be made in relation to,
and no funds will be raised from, the grant of Performance Rights
or the issue of Shares on exercise of vested Performance
Rights;
(d) the following persons referred to in ASX Listing Rule 10.14
have been granted a total of 78,811,730 Performance Rights under
the Performance Rights Plan since it was last approved by
Shareholders on 22 November 2013. All grants were for nil cash
consideration as the Performance Rights were issued as part of the
remuneration of the Company's Directors and employees;
(i) Gregory Stoupnitzky: 16,253,000 Performance Rights, of which
none have been converted into Shares;
(ii) Andrew Rose: 16,253,000 Performance Rights, of which none
have been converted into Shares;
(iii) Rob Shepherd: 21,670,596 Performance Rights, of which none
have been converted into Shares;
(iv) Andrew Bartlett: 11,632,776 Performance Rights, of which
none have been converted into Shares;
(v) Neil Hackett: 6,501,179 Performance Rights, of which none
have been converted into Shares; and
(vi) Andrew Sinclair: 6,501,179 Performance Rights, of which
none have been converted into Shares;
(e) as at the date of this Notice of Meeting, all of the
directors of the Company are entitled to participate in the
Performance Rights Plan;
(f) any additional persons referred to in ASX Listing Rule 10.14
who become entitled to participate in the Performance Rights Plan
and who were not named in the Notice will not participate in the
Plans until approval is obtained under ASX Listing Rule 10.14;
(g) no loan has or will be provided to Gregory Stoupnitzky in
relation to the grant of the Performance Rights;
(h) the Performance Rights will vest and become exercisable on
achievement of the vesting conditions set out in Section 5.4 above.
The Shares to be issued upon the vesting and exercise of the
Performance Rights shall rank pari passu with existing Shares;
and
(i) the Performance Rights will be granted to Gregory
Stoupnitzky subject to completion of the Vioco Disposal, the
approval of which is the subject of Resolution 1. They will be
granted on completion of the Disposal, which is anticipated to
occur on 21 August 2015, and in any event a date no later than 12
months after the date of the Meeting. Shares will be issued on
exercise of a vested Performance Right.
6. Resolution 10 - Re-election of director - glenn whiddon
Clause 13.4 of the Constitution allows the Directors to appoint
at any time a person to be a Director either to fill a casual
vacancy or as an addition to the existing Directors, but only where
the total number of Directors does not at any time exceed the
maximum number specified by the Constitution.
Pursuant to clause 13.4 of the Constitution and ASX Listing Rule
14.4, any Director so appointed holds office only until the next
following general meeting and is then eligible for election by
Shareholders but shall not be taken into account in determining the
Directors who are to retire by rotation (if any) at that
meeting.
Glenn Whiddon, having been appointed with effect from 2 June
2015 will retire in accordance with clause 13.4 of the Constitution
and ASX Listing Rule 14.4 and being eligible, seeks election from
Shareholders. Additional information in respect of Mr Whiddon is
set out in the Company's announcement to ASX dated 3 June 2015.
7. resolution 11 - Section 195 Approval
Approval of Resolutions 3 to 9 may result in the Directors
having a "material personal interest" in the matters referred to in
those resolutions. In the absence of this Resolution 11, the
Directors may not be able to form a quorum at any meetings
necessary to carry out the transactions contemplated by Resolutions
3 to 9.
Accordingly, Shareholder approval is being sought to allow the
Directors to form a quorum to implement the transactions
contemplated by Resolutions 3 to 9 of this Notice.
Glossary
$ means Australian dollars.
AIM means the Alternative Investment Market operated by London
Stock Exchange plc.
ASIC means the Australian Securities and Investments
Commission.
ASX means ASX Limited (ACN 008 624 691) or the Australian
Securities Exchange, as the context requires.
ASX Listing Rules means the Listing Rules of ASX.
Board means the current board of directors of the Company.
Business Day means Monday to Friday inclusive, except New Year's
Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any
other day that ASX declares is not a business day.
Chair means the chair of the Meeting.
Closely Related Party of a member of the Key Management
Personnel means:
(a) a spouse or child of the member;
(b) a child of the member's spouse;
(c) a dependent of the member or the member's spouse;
(d) anyone else who is one of the member's family and may be
expected to influence the member, or be influenced by the member,
in the member's dealing with the entity;
(e) a company the member controls; or
(f) a person prescribed by the Corporations Regulations 2001
(Cth) for the purposes of the definition of 'closely related party'
in the Corporations Act.
Company means Azonto Petroleum Ltd (ACN 117 227 086).
Constitution means the Company's constitution.
Corporations Act means the Corporations Act 2001 (Cth).
Directors means the current directors of the Company.
Explanatory Statement means the explanatory statement
accompanying the Notice.
General Meeting or Meeting means the meeting convened by the
Notice.
Key Management Personnel has the same meaning as in the
accounting standards issued by the Australian Accounting Standards
Board and means those persons having authority and responsibility
for planning, directing and controlling the activities of the
Company, directly or indirectly, including any director (whether
executive or otherwise) of the Company or an entity within the
consolidated group.
Notice or Notice of Meeting means this notice of meeting
including the Explanatory Statement and the Proxy Form.
Option means an option to acquire a Share.
Performance Right means a right to acquire a Share subject to
satisfaction of certain performance conditions.
Petroci means Petroci Société Nationale d'Opérations Petrolières
de Côte d'Ivoire, a company incorporated under the laws of Côte
d'Ivoire.
Petroci JV Administration Claim means the claim by Petroci
arising from its audit of the CI-202 Block Accounts for the
calendar years 2012 and 2013, but excluding the Petroci P3 Well
Audit Claim, that Vioco provided it with insufficient documentation
to satisfy its audit requirements.
Petroci P3 Well Audit Claim means the claim by Petroci, arising
from its audit of the CI-202 Block Accounts for the calendar years
2012 and 2013, with respect to possible cash call overpayments to
Vioco in connection with Petroci's change of working interest in
the CI-202 Block.
Proxy Form means the proxy form accompanying the Notice.
Resolutions means the resolutions set out in the Notice, or any
one of them, as the context requires.
Share means a fully paid ordinary share in the capital of the
Company.
Shareholder means a holder of a Share.
WST means Western Standard Time as observed in Perth, Western
Australia.
Schedule 1 - Proforma balance sheet
Unaudited Proforma Balance
Sheet
As at 31 May 2015
All figures $'000 $'000 $'000
are AUD
31 May Disposal Post
2015 Disposal
Assets
Current assets
Cash & equivalents 3,965 4,060 8,026
Receivables 1,555 - 1,555
Other current assets 85 - 85
Total Current Assets 5,605 4,060 9,665
---------- --------- ----------
Non-current assets
Investment in associated
company 36,082 (36,082) -
Property, plant
& equipment 285 - 285
Total non-current
assets 36,367 (36,082) 285
---------- --------- ----------
Total assets 41,972 (32,021) 9,951
---------- --------- ----------
Liabilities
Current liabilities
Trade & other payables 1,793 - 1,793
Provisions 60 - 60
Total current liabilities 1,853 - 1,853
---------- --------- ----------
Total liabilities 1,853 - 1,853
---------- --------- ----------
Net assets 40,119 (32,021) 8,097
---------- --------- ----------
Equity
Parent interest
Issued capital 242,775 - 242,775
Employee benefits
reserve 13,815 - 13,815
Foreign currency
translation reserve 8,807 (7,060) 1,748
Equity reserve (2,428) - (2,428)
Retained earnings (222,851) (24,962) (247,813)
Total equity 40,119 (32,021) 8,097
---------- --------- ----------
Notes:
The consideration is assumed to comprise USD $4 million cash
(less up to a maximum of USD $0.4 million in net liabilities for
Vioco) plus USD $1.1 million cash consideration for the wellhead
drilling equipment. Transaction costs comprise advisors and legal
fees (USD $0.9m) and success bonuses (aggregate total of USD $0.5m)
allocated between Gregory Stoupnitzky, as Chief Executive Office
and Jay Smulders and Jeff Durkin as senior managers of the Company.
The cash consideration does not include US$2 million which is
payable upon the occurrence of a hydrocarbon discovery.
The disposal adjustments reflect the receipt of the cash
consideration less transaction cost, the de-recognition of the
carrying value of the Company's investment in Vioco (AUD $36.1m),
the recycling of Vioco's foreign currency transaction reserve (AUD
$7.1m) and a resulting loss on disposal within Accumulated losses
(AUD $24 million). No value has been subscribed to the possible
hydrocarbon discovery payment of $2 million. The exchange rate for
AUD/USD is at 31 May 2015 of AUD $1 = USD $0.7637.
PROXY FORM
APPOINTMENT OF PROXY
Azonto Petroleum Ltd
ACn 117 227 086
GENERAL MEETING
I/We
--------------------------------------------
of:
--------------------------------------------
being a Shareholder entitled to attend and vote
at the Meeting, hereby appoint:
Name:
--------------------------------------------
OR: the Chair of the Meeting as my/our proxy.
or failing the person so named or, if no person is named, the
Chair, or the Chair's nominee, to vote in accordance with the
following directions, or, if no directions have been given, and
subject to the relevant laws as the proxy sees fit, at the Meeting
to be held at 10.00 (WST), on 17 August 2015 at Steinepreis
Paganin, Level 4, The Read Buildings, 16 Milligan Street, Perth
6000, and at any adjournment thereof.
Chair's voting intention in relation to undirected proxies
The Chair intends to vote undirected proxies in favour of all
Resolutions. In exceptional circumstances the Chair may change
his/her voting intention on any Resolution. In the event this
occurs an ASX announcement will be made immediately disclosing the
reasons for the change.
Voting on business of the Meeting FOR AGAINST ABSTAIN
Resolution 1 - Disposal of main undertaking
Resolution 2 - Adoption of Investing Policy
Resolution 3 - Issue of Shares in Lieu of Fees - Andrew
Bartlett
Resolution 4 - Issue of Shares in Lieu of Fees - Andrew
Sinclair
Resolution 5 - Issue of Shares in Lieu of Fees - Neil
Hackett
Resolution 6 - Issue of Shares in Lieu of Salary - Gregory
Stoupnitzky
Resolution 7 - Issue of Shares in Lieu of Salary - Gert-Jan
Smulders
Resolution 8 - Issue of Shares in Lieu of Salary - Jeff
Durkin
Resolution 9 - Issue of Performance Rights - Greg
Stoupnitzky
Resolution 10 - Re-Election of Director - Glenn Whiddon
Resolution 11 - Section 195 Approval
Please note: If you mark the abstain box for a particular
Resolution, you are directing your proxy not to vote on that
Resolution on a show of hands or on a poll and your votes will not
be counted in computing the required majority on a poll.
If two proxies are being appointed, %
the proportion of voting rights this
proxy represents is:
-------------------
Signature of Shareholder(s):
Individual or Shareholder 2 Shareholder 3
Shareholder 1
---------------------------------------- ----------------------- -----------------------
Sole Director/Company Director Director/Company
Secretary Secretary
Date:
-----
Contact Contact ph
name: (daytime):
----- ---------------------
Consent for contact
by e-mail in
E-mail relation to this
address: Proxy Form: YES NO
-----
Instructions for completing Proxy Form
1. (Appointing a proxy): A Shareholder entitled to attend and
cast a vote at the Meeting is entitled to appoint a proxy to attend
and vote on their behalf at the Meeting. If a Shareholder is
entitled to cast 2 or more votes at the Meeting, the Shareholder
may appoint a second proxy to attend and vote on their behalf at
the Meeting. However, where both proxies attend the Meeting, voting
may only be exercised on a poll. The appointment of a second proxy
must be done on a separate copy of the Proxy Form. A Shareholder
who appoints 2 proxies may specify the proportion or number of
votes each proxy is appointed to exercise. If a Shareholder
appoints 2 proxies and the appointments do not specify the
proportion or number of the Shareholder's votes each proxy is
appointed to exercise, each proxy may exercise one-half of the
votes. Any fractions of votes resulting from the application of
these principles will be disregarded. A duly appointed proxy need
not be a Shareholder.
2. (Direction to vote): A Shareholder may direct a proxy how to
vote by marking one of the boxes opposite each item of business.
The direction may specify the proportion or number of votes that
the proxy may exercise by writing the percentage or number of
Shares next to the box marked for the relevant item of business.
Where a box is not marked the proxy may vote as they choose subject
to the relevant laws. Where more than one box is marked on an item
the vote will be invalid on that item.
3. (Signing instructions):
-- (Individual): Where the holding is in one name, the Shareholder must sign.
-- (Joint holding): Where the holding is in more than one name,
all of the Shareholders should sign.
-- (Power of attorney): If you have not already provided the
power of attorney with the registry, please attach a certified
photocopy of the power of attorney to this Proxy Form when you
return it.
-- (Companies): Where the company has a sole director who is
also the sole company secretary, that person must sign. Where the
company (pursuant to Section 204A of the Corporations Act) does not
have a company secretary, a sole director can also sign alone.
Otherwise, a director jointly with either another director or a
company secretary must sign. Please sign in the appropriate place
to indicate the office held. In addition, if a representative of a
company is appointed pursuant to Section 250D of the Corporations
Act to attend the Meeting, the documentation evidencing such
appointment should be produced prior to admission to the Meeting. A
form of a certificate evidencing the appointment may be obtained
from the Company.
4. (Attending the Meeting): Completion of a Proxy Form will not
prevent individual Shareholders from attending the Meeting in
person if they wish. Where a Shareholder completes and lodges a
valid Proxy Form and attends the Meeting in person, then the
proxy's authority to speak and vote for that Shareholder is
suspended while the Shareholder is present at the Meeting.
5. (Return of Proxy Form): To vote by proxy, please complete and
sign the enclosed Proxy Form and return by:
(b) post to the Company at: Suite 6, 245 Churchill Avenue,
Subiaco WA 6008, Australia;
(c) facsimile to the Company on facsimile number +61 8 9486 9362,
so that it is received not less than 48 hours prior to
commencement of the Meeting.
Proxy Forms received later than this time may be invalid.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLIFVTDSIDLIE
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