Wrap Text
Notice Under Section 708A(12C)(e) Of The Corporations ACT 2001
FIRESTONE ENERGY LIMITED
(Incorporated in Australia)
(Registration number ABN 058 436 794)
Share code on the JSE Limited: FSE
Share code on the ASX: FSE
ISIN: AU000000FSE6
(SA company registration number 2008/023973/10)
("FSE" or "the Company")
The Manager
Companies Announcements Office
Australian Securities Exchange
NOTICE UNDER SECTION 708A(12C)(e) OF THE CORPORATIONS ACT 2001
This notice is given by Firestone Energy Limited (Company) (ASX: FSE) pursuant to section
708A(12C)(e) of the Corporations Act 2001 (Cth) (Act).
The Company announced to the ASX on 5 February 2013 that it has issued 27.145 million
secured convertible notes (Convertible Notes) with a principal amount of $1.00 each to certain
professional and sophisticated investors.
The Company hereby gives notice that:
1. The Convertible Notes were issued without a disclosure document under Part 6D.2 of the
Act.
2. This notice has been given in accordance with section 708A(12C)(e) of the Act as inserted
by Class Order [CO 10/322] (on-sale for convertible notes issued to wholesale investors).
1. EFFECT OF THE ISSUE ON THE COMPANY
The Company has entered into a $39.645 million secured convertible note facility (NCN
Facility). The convertible note facility will enable the repayment of the existing
convertible notes (ECNs), as the ECNs started maturing in October 2012.
Completion is to occur in the following two stage process:
(a) the First Completion involves the Company issuing $27.145 million of new
secured convertible notes (NCNs); and
(b) the Second Completion involves the Company issuing $12.50 million of NCNs.
On 5 February 2013, First Completion occurred and the Company issued 27.145 million
NCNs and has now raised $27.145 million through the NCN Facility, with a further
$12.5 million to be received on Second Completion occurring.
The NCN Facility will allow for additional working capital of approximately $15.1 million
so that the Company is fully funded through to completion of the Bankable Feasibility
Study for the Company’s flagship Waterberg Coal Joint Venture Project.
The $39.645 million to be raised by means of the NCN Facility will be applied in
approximately the manner set out below:
Redeem existing convertible notes at face value $21,300,000
Pay outstanding interest on the existing convertible $845,000
notes
Working Capital $15,100,000
Expenses of the transaction (estimate) $2,400,000
Total $39,645,000
The proceeds of First Completion will be applied as follows:
• the injection of A$5 million of cash into Firestone, and
• the redemption and replacement of $21.3 million of Existing Convertible Notes
(ECNs) and accrued interest of $845,000.
The Company has issued to the ECN holders 300 million incentive options exercisable
over 2 years at a price of $0.025 per share. The incentive options were issued as an
incentive to ECN holders for agreeing to early redemption of those ECNs which
matured after October 2012.
On conversion of the entire 39.645 million of NCNs the NCN holders may receive up to
a maximum of 2,170,276,800 shares comprising 1,585,800,000 shares on conversion of
the NCNs and up to a further 584,476,800 shares if interest on the NCNs is capitalised
and they elect to receive all interest in shares.
As a result, the holders of the NCN's may hold a maximum of 41.07% of the issued
capital of the Company.
The table below sets out the effect on the issued share capital of the Company on
conversion of the NCNs (and capitalised interest) broken down into the First
Completion and Second Completion. It should be noted that only First Completion has
occurred as at the date of this Notice.
Shares issued Shares capitalised Total Shares % of Voting
Facility
on conversion interest Issued Interests*
First Completion
1,085,800,000 400,192,275 1,485,992,275 32.31
$27.145 million
Second
Completion 500,000,000 184,284,525 684,284,525 12.92
$12.5 million
Total 1,585,800,000 584,476,800 2,170,276,800 41.072
* Based on current issued shares of 3.114 billion
1. voting % calculated as if Second Completion NCNs were not issued and converted
2. voting % calculated as if Second Completion NCNs were issued and converted
2. RIGHTS AND LIABILITIES ATTACHING TO THE NCNs
The following is a summary of the rights and liabilities attaching to the NCNs:
2.1 Face Value
A$1.00 per note
2.2 Term
4 years
2.3 Interest
(a) 8% per annum
(b) Payable 6 monthly (on the 6 month and 12 month anniversary of the issue date)
(c) For the first 24 months, interest is payable in cash or capitalised, at the election of
the Company
(d) After the first 24 months, interest is payable in cash or if Company and majority
noteholder agree, capitalised
(e) Noteholder can on conversion, elect to receive any outstanding interest in cash or
in shares.
2.4 Security
The notes are secured over the assets of the Company and its wholly owned subsidiaries
that hold the interest in the Waterberg Coal Joint Venture Project.
2.5 Conversion
(a) At election of noteholder at any time prior to maturity date (4 years from date of
issue).
(b) Conversion price - $0.025 per share (subject to adjustment for capital
reorganisations).
(c) Shares issued on conversion (including in respect of interest) rank equally with all
other shares on issue from the conversion date.
(d) Company has no obligation to convert if it would result in the noteholder
exceeding takeover threshold of 20%.* If the value of the NCNs (including any
capitalised interest) being converted is greater than A$500,000 and the relevant
noteholder so requests, the Company must seek any necessary shareholder
approval to allow the conversion to occur.
(e) On issue of shares on conversion, FSE must issue a cleansing notice to the
market or prepare and lodge with ASIC a prospectus in compliance with Chapter
6D of the Act.
* Shareholder approval has been obtained pursuant to Item 7 of section 611 of the
Act in relation to the conversion of all NCNs plus capitalised interest. Therefore,
this requirement will only be triggered if the holder of the NCNs acquires
additional shares in the Company prior to conversion of the NCNs.
2.6 Capital Reorganisations
(a) Reorganisations of issued capital, such as share splits or share consolidations, will
take place on the same basis.
(b) Issues of shares and convertible securities – on a formula basis to preserve the
effective value, as at the issue date, of converting the NCNs at 2.5 cents per share
– this applies to all issues (including issues of convertible securities) with an issue,
exercise or conversion price of less than 2.5 cents per share).
(c) Capital reductions - on a formula basis to preserve the effective value, as at the
completion date, of converting the NCNs at 2.5 cents per share.
(d) Share buybacks - on a formula basis to preserve the effective value, as at the issue
date, of converting the NCNs at 2.5 cents per share.
2.7 Redemption
(a) Any notes outstanding at the maturity date, and which are not then subject to a
conversion notice, are to be redeemed.
(b) Redemption payment is to be in Australian dollars, inclusive of any capitalised
interest.
2.8 Transferability
Notes can be transferred but will not be quoted on ASX.
2.9 Voting Rights
At a meeting of noteholders, subject to a number of specified exceptions, on a show of
hands each noteholder present in person or by proxy (or, in the case of a corporation,
present by duly appointed representative, proxy or attorney) has one vote. On a poll,
each noteholder present in person or by duly appointed representative, proxy or attorney
has one vote for each note held.
2.10 Meetings
(a) Noteholders are entitled to receive all notices and accounts sent to shareholders.
(b) Noteholders can attend shareholder meetings but cannot vote or speak at the
meetings except as provided for in the Act or the ASX Listing Rules.
3. RIGHTS AND LIABILITIES ATTACHING TO SHARES ISSUED ON THE
CONVERSION OF THE NCNS
This section contains a summary of the rights and liabilities as at the date of this
document attaching to the shares to be issued on the conversion of the NCNs. This
summary does not purport to be exhaustive nor to constitute a definitive statement of
the rights and liabilities of shareholders, which can involve complex questions of law
arising from the interaction of the Company's constitution, ASX Listing Rules,
Johannesburg Stock Exchange Listing Requirements and Australian Settlement and
Transfer Corporation (ASTC) Settlement Rules and statutory and common law
requirements.
3.1 Voting Rights
At a general meeting, subject to a number of specified exceptions, on a show of hands
each shareholder present in person or by proxy (or, in the case of a corporation, present
by duly appointed representative, proxy or attorney) has one vote. On a poll, each
shareholder present in person or by duly appointed representative, proxy or attorney has
one vote for each fully paid share held and partly paid shares confer a fraction of a vote
pro-rata to the amount paid up on the share.
3.2 Dividends
The directors of the Company (Directors) may declare a dividend, or determine that a
dividend is payable, and may fix the amount, the time for and the method of payment.
Dividends are payable on shares in proportion to the amount of the total issue price paid
(but not credited) for the shares. Each partly paid share is entitled to a fraction of the
divided equivalent to the proportion which the amount paid (excluding amounts
credited) on the share bears to the total amounts paid and payable, whether or not called,
(excluding amounts credited) on the share.
3.3 Variation of Rights
The rights attached to shares in any class of shares, unless otherwise provided for by the
terms of issue of those shares, may only be varied or cancelled with the consent in
writing of the holders of at least three-quarters of the issued shares in the relevant class,
or with the sanction of a special resolution passed at a meeting of the holders of the
shares in that class.
3.4 Transfer of Shares
Shares, when granted quotation on ASX, are transferable by:
(a) a written transfer instrument in the usual or common form or in any form the
Directors may approve or in a particular case accept, duly stamped (if necessary),
being delivered to the Company;
(b) a proper ASTC transfer, which is to be in the form required or permitted by the
Act, the ASX Listing Rules or the ASTC Settlement Rules; or
(c) any other electronic system established or recognised by the ASX Listing Rules in
which the Company participates in accordance with the operating rules of that
system.
The Directors may, subject to the requirements of the Act and the ASX Listing Rules,
refuse to register any transfer of shares in the following circumstances:
(d) if the registration would infringe any applicable laws or the ASX Listing Rules;
(e) if the transfer may be in breach of any restriction agreement entered into by the
Company under the ASX Listing Rules in relation to the shares; or
(f) if permitted to do so under the ASX Listing Rules.
3.5 Issue of further shares
All unissued shares are under the control of the Directors, who may subject to the ASX
Listing Rules and the Act, grant options over the shares, issue or otherwise dispose of the
shares on the terms and conditions and for the consideration they think fit. Without
affecting any special rights conferred on the holders of any shares, any share may be
issued with preferred, deferred or other special rights, conditions or restrictions, whether
in regard to dividends, voting, return of share capital, or otherwise, as the Directors may
determine.
3.6 General Meetings and Notices
Each shareholder of the Company (Shareholder) is entitled to receive notice of, and to
attend all general meetings of the Company and to receive all notices required to be sent
to Shareholders under the Constitution, the Act or the ASX Listing Rules. The Company
may serve a notice on a Shareholder by serving it on the Shareholder or by sending it by
prepaid post, courier, facsimile transmission or electronic notification addressed to the
Shareholder’s registered address or the address supplied by the Shareholder to the
Company for sending notices to that Shareholder.
3.7 Winding Up
Without affecting any special rights conferred on the holders of any shares, if the
Company is wound up, the liquidator may, with the sanction of a special resolution of the
Company, divide amongst all or any of the Shareholders in kind all or any part of the
Company’s assets, as the liquidator thinks fit. The liquidator may not compel a
Shareholder to accept any shares or other securities in respect of which there is any
liability.
3.8 Number of Directors
The Constitution provides that the Board may determine the number of Directors,
subject to the number of Directors not being less than 3 nor more than 9. The Company
may, by resolution passed at a general meeting, increase the minimum, or increase or
reduce the maximum, number of Directors. All Directors are to be natural persons.
3.9 Amending the Constitution
The Act provides that the Constitution of the Company may be modified or repealed and
replaced by a special resolution passed by the members of the Company. The
Constitution does not provide for any further requirements to be complied with to effect
a modification of, or to repeal and replace, the Constitution.
4. COMPLIANCE WITH REGULAR REPORTING AND DISCLOSURE
OBLIGATIONS
The Company is a disclosing entity for the purposes of the Act and, as such, subject to
regular reporting and disclosure obligations. These obligations include compliance with
the requirements of the ASX Listing Rules and the Act concerning notification of
information to the ASX. Copies of documents lodged with the Australian Securities and
Investment Commission (ASIC) in relation to the Company may be obtained from, or
inspected at, an office of ASIC. Copies of announcements made to the ASX by the
Company may be viewed on the ASX website.
The Company will provide a copy of any of the following documents free of charge, to
any person on request:
(a) a copy of its financial report most recently lodged with ASIC;
(b) any half-year financial report lodged with ASIC after lodgement of that annual
financial report and before the lodgement of this cleansing notice; and
(c) any continuous disclosure notices given after the lodgement of the 2012 annual
financial report and before the lodgement of this cleansing notice as set out in the
table below:
31/01/2013 Dec 2012 Quarterly Activities Report and 5B Cashflow
30/01/2013 Bidder Statement
Firestone's Response to Range River's Takeover
18/12/2012 Announcement
17/12/2012 RNG: Takeover Offer for Firestone Energy Limited
17/12/2012 Financial Restructure Update
12/12/2012 RNG: Proposed 100% Acquisition of Ariona Company SA
06/12/2012 Corrective Announcement re Appointment of Directors
03/12/2012 Expiry of Unlisted Options
28/11/2012 Results of Meeting and Appointment of Directors
28/11/2012 Eskom MOU Update
20/11/2012 Financial Restructure Update
13/11/2012 Update on Financial Restructure
31/10/2012 Sept 2012 Quarterly Activities Report and 5B Cashflow
30/10/2012 Notice of Annual General Meeting/Proxy Form
05/10/2012 Financial Restructure Update and Results of Meeting
Any requests for copies of the above documents should be emailed to Mr Jerry Monzu,
the Company Secretary, at jerry@monzucorp.com.au.
5. INFORMATION EXCLUDED FROM CONTINUOUS DISCLOSURE
NOTICES
The market is fully informed of the Company's activities and the Company is not aware
of any other information that:
(a) has been excluded from a continuous disclosure notice in accordance with the
ASX Listing Rules; and
(b) is information that investors and their professional advisers would reasonably
require for the purposes of making an information assessment of:
(i) the assets and liabilities, financial position and performance, profits and
losses and prospects of the body; and
(ii) the rights and liabilities attaching to the NCNs to be issued.
5 February 2013
Mr Jerry Monzu
Company Secretary
Sponsor
River Group
Date: 05/02/2013 08:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
