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FIRESTONE ENERGY LIMITED - Takeover Panel Findings

Release Date: 20/05/2013 07:35
Code(s): FSE     PDF:  
Wrap Text
Takeover Panel Findings

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")




                        MEDIA RELEASE
                                                                            No: TP13/17
                                                                    Friday, 17 May 2013

          Firestone Energy Limited – Declaration of Unacceptable Circumstances
                                      and Orders

The Panel has made a declaration of unacceptable circumstances (Annexure A) and
final orders (Annexure B) in relation to an application dated 18 April 2013 by
Firestone Energy Limited in relation to its affairs (see TP13/10).

Background

Firestone has a right to a 60% participation interest in the Waterberg coal project in
South Africa. On 17 December 2012, The Waterberg Coal Company Limited (formerly known as Range River Gold Limited)
announced an off-market scrip bid for Firestone.

On 30 January 2013, Waterberg issued its bidder’s statement, which included a
statement that “[Firestone] shareholders will have exposure to a 70% interest in the
Waterberg Project (whereas currently [Firestone] holds a 60% interest).” On 27 March
2013, Waterberg increased the bid consideration to 1.25:20 (post consolidation) and
declared the offer unconditional. Also on 27 March 2013, Waterberg’s shareholders
approved (among other things) the acquisition of 46.88% of Waterberg by Haworth
Finance Limited.

Declaration

The original and supplementary bidder’s statements are deficient, in that they do
not:
(a)      adequately disclose Haworth’s shareholding in Waterberg, or the identities of
         the owners and controllers of the investors in Haworth
(b)      adequately identify the lenders under the convertible financing facility between
         Waterberg and Standard Bank of South Africa and the facility’s potential impact
         on Waterberg’s capital structure and
(c)      adequately inform Firestone shareholders of their exposure to the Waterberg
         coal project, given the contemplated capital structure of Waterberg.

                                                
The Panel did not consider it against the public interest to make the declaration, and
in making it had regard to the matters in s657A(3).

The Panel declined to make a declaration in relation to the other aspects of the
application.

Orders

The Panel has made orders that Waterberg dispatch a supplementary bidder’s
statement in a form approved by the Panel, provide Firestone shareholders who have
accepted the offer with a withdrawal right and extend its offer until at least 7 days
after the conclusion of the withdrawal right.

The Panel will refer the matter of the ownership and control of certain of the
Haworth trust beneficiaries to ASIC for investigation.

The sitting Panel was Rodd Levy, Peter Scott (sitting President) and John Story.

The Panel will publish its reasons for the decision in due course on its website
www.takeovers.gov.au.


Allan Bulman
Director, Takeovers Panel
Level 10, 63 Exhibition Street
Melbourne VIC 3000
Ph: +61 3 9655 3597
allan.bulman@takeovers.gov.au




              
                                     Annexure A

CORPORATIONS ACT
SECTION 657A 
DECLARATION OF UNACCEPTABLE CIRCUMSTANCES
FIRESTONE ENERGY LIMITED

CIRCUMSTANCES

1.   Firestone Energy Limited (Firestone) is an ASX listed company. It has a right to
     a 60% participation interest in a coal project in South Africa (the Waterberg
     Project).
2.   On 17 December 2012, The Waterberg Coal Company Limited, formerly known
     as Range River Gold Limited (Waterberg), announced an off-market scrip bid
     for all the shares in Firestone. The consideration was 1 Waterberg share for
     every 2 Firestone shares (post Waterberg consolidation, 1:20).
3.   On 30 January 2013, Waterberg issued its bidder’s statement. The bidder’s
     statement included the following:
     “[Firestone] shareholders will have exposure to a 70% interest in the Waterberg Project
     (whereas currently [Firestone] holds a 60% interest).”
4.   On 20 March 2013, Waterberg issued a supplementary bidder’s statement,
     advising (among other things) of variations to existing arrangements affecting
     its capital structure.
5.   On 27 March 2013, Waterberg issued a second supplementary bidder’s
     statement, increasing its bid consideration to 1.25:20 and freeing its bid from all
     defeating conditions.
6.   Also on 27 March 2013, Waterberg’s shareholders approved (among other
     things) the acquisition of 46.88% of Waterberg by Haworth Finance Limited
     (Haworth).
7.   The original bidder’s statement and the supplementary bidder’s statements
     contain information deficiencies, in that:
     (a)   they do not adequately disclose the identities of the owners and
           controllers of Haworth
     (b)   they do not adequately identify the lenders under the convertible
           financing facility between Waterberg and Standard Bank of South Africa
           and the facility’s potential impact on Waterberg’s capital structure and
      (c)   they do not adequately inform Firestone shareholders of their exposure to
            the Waterberg Project given the contemplated capital structure of
            Waterberg.
8.    By reason of the information deficiencies, Firestone shareholders:
      (a)   do not know the identity of persons holding a substantial interest in
            Waterberg, which proposes to acquire a substantial interest in Firestone
      (b)   have not been given enough information to enable them to assess the
            merits of Waterberg’s bid and
      (c)   are required to make decisions whether to hold their shares, accept the
            offer or dispose of their shares in other ways on the basis of inadequate
            information, causing the market for control of Firestone shares not to be
            efficient, competitive and informed.
9.    It appears to the Panel that the circumstances are unacceptable having regard
      to:
      (a)   the effect that the Panel is satisfied the circumstances have had, are
            having, will have or are likely to have on:
            (i)    the control, or potential control, of Firestone or
            (ii)   the acquisition, or proposed acquisition, by a person of a substantial
                   interest in Firestone and
      (b)   the purposes of Chapter 6 set out in section 602 of the Corporations Act
            2001 (Cth) (Act)
10.   The Panel considers that it is not against the public interest to make a
      declaration of unacceptable circumstances. It has had regard to the matters in
      section 657A(3) of the Act.
DECLARATION
The Panel declares that the circumstances constitute unacceptable circumstances in
relation to the affairs of Firestone.




Alan Shaw
Counsel
with authority of Peter Scott
President of the sitting Panel
Dated 17 May 2013




                                             
                                    Annexure B
FIRESTONE ENERGY LIMITED

The Panel made a declaration of unacceptable circumstances on 17 May 2013.

THE PANEL ORDERS

1.   The Waterberg Coal Company Limited (Waterberg) must issue a
     supplementary bidder’s statement in relation to its bid for Firestone Energy
     Limited (Firestone), in a form approved by the Panel, that includes:

     (a)   adequate disclosure of the identities of the owners and controllers of
           Haworth Finance Limited, the identities of persons who own or control
           the beneficiaries of the Haworth Trust (Haworth Beneficiaries) and the
           aggregate and individual shareholdings of the Haworth Beneficiaries

     (b)   adequate disclosure of the identity of lenders under the convertible
           financing facility between Waterberg and Standard Bank of South Africa
           and the facility’s potential impact on Waterberg’s capital structure

     (c)   adequate disclosure of Firestone shareholders’ exposure to the coal project
           known as the Waterberg Project, given Waterberg’s contemplated capital
           structure

     (d)   a right to withdraw by any Firestone shareholder who accepted the bid

     (e)   instructions setting out what a shareholder must do to exercise the
           withdrawal right

     (f)   a statement that the corrective disclosure was required by the Panel and

     (g)   a statement that the offer period has been, or will be, extended so as to
           comply with these orders.

2.   Waterberg must release the supplementary bidder’s statement on ASX and
     dispatch it to everyone to whom offers were made in the same manner as the
     offers were sent.

3.   Waterberg must give each Firestone shareholder who accepted Waterberg’s
     offer a right to withdraw their acceptance:

     (a)   by giving Waterberg notice (so that it is received within 10 days of the
           date of dispatch of the supplementary bidder’s statement) in the form
           attached to the supplementary bidder’s statement or complying with
           Corporations Regulation 6.6.01(1), as the case may be and
     (b)   by giving Waterberg any certificates and transfer documents needed to
           effect the return of the securities issued as consideration or complying
           with Corporations Regulation 6.6.01(2), as the case may be.
4.   Waterberg must comply with Corporations Regulation 6.6.01(3) in relation to
     each person who withdraws their acceptance.
5.   Waterberg must extend its offer so that it is open for no less than 7 days after
     the last date for Firestone shareholders to withdraw acceptances.
6.   In respect of each acceptance withdrawn, the securities issued as consideration
     are cancelled.




Alan Shaw
Counsel
with authority of Peter Scott
President of the sitting Panel
Dated 17 May 2013

Johannesburg
20 May 2013

Sponsor
River Group


                                         

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