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Aspire Mining receives additional undertakings regarding $33.5 million placement

Major investor Mr Tserenpuntsag has committed to exercise all of his 1.8 cent options to raise an additional $2.75 million for Aspire.

Aspire Mining Ltd - Aspire Mining receives additional undertakings regarding $33.5 million placement
The company is focused on early coking coal production from Ovoot project in Mongolia

Aspire Mining Ltd (ASX:AKM) has received additional commitments from major shareholder Mr Tserenpuntsag in connection with his proposed $33.5 million equity investment in the company.

The Mongolian-based shareholder has committed to exercise all his 153.3 million 1.8 cent options which are due to expire on December 11, 2019.

This will raise an additional $2.75 million for Aspire and is subject to shareholder approval at the AGM on November 29, 2019.

Ongoing financial support

The exercise price was around 50% above the share price of 1.2 cents when the announcement was released by the ASX and represents further evidence of Mr Tserenpuntsag’s ongoing financial support to the company.

When combined with the proposed $33.5 million placement at 2.1 cents per share, this will result in a total investment by Mr Tserenpuntsag in Aspire of $36.25 million.

If the placement is approved and no other options are exercised, the investor’s total stake will be 52.5%.

Mr Tserenpuntsag has also committed to maintain at least two independent directors on the Aspire Board to represent the interests of minority shareholders.

“Demonstrate extent of commitment”

Aspire’s executive chairman David Paull said: “These two additional clarifications of intent from Mr Tserenpuntsag demonstrate the extent of his commitment to support Aspire to realise the substantial value present in the company’s Ovoot Coking Coal Project for all of the company’s shareholders.

“Having an invested Mongolian partner to help achieve our ambition of delivering substantial value for all shareholders is paramount and we are delighted with the ongoing support provided by our largest shareholder, Mr Tserenpuntsag.”

Aspire’s shares have been up as much as 15% to 1.5 cents today.

Director representation

Since announcing the proposed placement on September 6, 2019, the company has engaged with shareholders regarding the extent of minority shareholder representation on the board.

The subscription agreement with Mr Tserenpuntsag noted that if the proposed placement completed, the Board of Aspire would be reduced to five directors including two nominated by Mr Tserenpuntsag.

Mr Tserenpuntsag provided a commitment to maintain this structure for at least six months post completion of the placement, however, no assurances were provided regarding the structure after this period.

In order to ensure ongoing fair representation, Aspire has engaged further with Mr Tserenpuntsag, culminating in him agreeing to provide additional commitments with regards to the company’s board:

  • In the event that one or more of existing Directors David Paull, Neil Lithgow and/or Hannah Badennach resign or are otherwise removed from the board, the company will promptly appoint a replacement independent director (in accordance with the ASX Corporate Governance Principles and Recommendations) to represent the interest of minority shareholders so as to ensure there is at all times a minimum of at least two directors who are not aligned with Mr Tserenpuntsag. For these purposes, any director nominated by Noble Group is to be counted towards meeting this minimum number of directors appointed to represent the interests of minority shareholders.
  • If additional directors are required to be appointed to represent the interests of minority shareholders, Aspire is to appoint a reputable Australian executive recruitment firm to provide a shortlist of potential candidates. Any director aligned with or nominated by Mr Tserenpuntsag will not participate in any decisions to select and appoint the relevant candidate(s).

Mr Tserenpuntsag has confirmed that Noble will maintain a right to nominate a director to the company’s board for so long as it holds more than 9.9% of the issued capital of Aspire.

No change in expert opinion

The additional commitments from Mr Tserenpuntsag have been provided to the Independent Expert, BDO Corporate Finance (WA) Pty Ltd (BDO), to determine whether they would have any impact upon their opinion of the merits of the proposed share placement to be considered by shareholders at the upcoming AGM.

BDO has confirmed that their opinion remains unchanged and that the proposed share placement to Mr Tserenpuntsag is “not fair but reasonable” to Aspire shareholders in the absence of a superior offer.

Quick facts: Aspire Mining Ltd

Price: 0.17 AUD

ASX:AKM
Market: ASX
Market Cap: $83.69 m
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Aspire Mining Ltd (ASX:AKM) managing director and chairman David Paull updates Proactive on receiving additional commitments from major shareholder Mr Tserenpuntsag in relation to his proposed $33.5 million equity investment in company. Mr Tserenpuntsag will exercise all his 153.3 million...

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