Proactive Investors - Run By Investors For Investors

Chrome producer Afarak bows to shareholder pressure

Afarak has now said it will honour the result of a shareholder vote which could see it forced to buy back shares from investors
afarak chrome plant
Major shareholder LNS is the instigator, but it won’t be selling down any of its stake

Chrome producer Afarak Group PLC (LON:AFRK) will bow to pressure from one of its major shareholders and offer to buy back its shares if investors vote in favour of the idea at an upcoming extraordinary general meeting.

LNS, which owns more than a 10% stake in the company, has argued for some time that because of liquidity constraints, particularly in the local Helsinki market, where Afarak is based, the company should offer to buy out its shareholders.

READ: LNS clarifies share buyback proposal

Bosses had previously not been in favour of such a proposal, but a statement on Friday afternoon said it was their “duty” to carry out the wishes of shareholders, whatever that may be.

“If the general meeting decides to authorise the board to execute the proposed transaction with a relevant majority, the board sees that it is the duty of the board to execute the transaction.”

LNS wants Afarak to offer €1.015 in cash for each share and has also asked for the offer to be limited to 28.404mln shares. The company said it would not publish an offer price at this time.

As for timings, should shareholders vote through the proposal, Afarak thinks March 2019 makes the most sense to lodge the offer, as that is when the financial statements for 2018 will be ready by.

The plan at the moment would be for the offer period to open in early March and close towards the end of that month.

Should the offer be executed, LNS, along with fellow shareholder ATKEY, has said it won’t sell any of its shares.

Afarak’s London shares were up 7.1% to 83p in mid-afternoon trade on Friday.

View full AFRK profile View Profile

Related Articles

December 14 2018
Savannah Resources sees potential to increase the current mineral resource estimate of the Mina do Barroso project
project area
October 10 2018
The company has identified extensive copper-nickel-cobalt mineralisation at the Mt Venn Project, outlined over several kilometres.
June 07 2018
Primary Cobalt Corp is a project generator in growth mode

© Proactive Investors 2019

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use