The Company held its most recent Annual General Meeting (the “AGM”) on 31 July 2018. As announced immediately after the AGM, resolutions 5 and 6 were not passed. Both these resolutions were required to enable the board of directors of the Company (the “Board” or “Directors”) to allot and issue additional shares, should the Company need to raise additional capital and to take advantage of opportunities that may arise that require the Company to allot shares other than on a pre-emptive basis.
The Company’s corporate update on 27 September 2018 and subsequent announcement on 28 September 2018 of the unaudited interim results for the six months ended 30 June 2018 highlighted that, without the Board being able to allot new shares, the Company is entirely reliant on its major shareholder Hudson Global Group Limited (“Hudson”). In order for the Company to continue normal operations beyond mid-November 2018, as matters stand, Hudson would need to permit further drawdowns under its loan facility to the Company. No assurance from Hudson of its continued financial support has been received.
The Company has recently received offers to engage in exploratory third-party financing discussions. However the Company must receive shareholder approval to allot new shares before it is able to accept equity financing and creditor approval from both Hudson and its sister company CS International (S) Pte Limited (“CS International”), who between them have three loans to the Company outstanding, before it is able to accept third-party debt financing.
Should the Company successfully address these issues, the Directors believe Bellzone is in a position to begin monetising its main assets and is on course to meet its updated timetable obligations under its Mining Convention. Nevertheless, the Company has assessed that the current likelihood of new unsecured debt financing is very low, given that all of the Company’s assets are already pledged to Hudson and CS International and, in any case, the Company’s main assets have meaningful monetary value only if Bellzone continues as a going concern.
Without an urgent shareholder mandate to engage in equity financing, the Company may have no choice but to invoke an insolvency procedure, which will be detrimental to all shareholders. Therefore the Directors have decided to call for an urgent General Meeting to allow shareholders to re-consider their positions with respect to the same two resolutions which failed to pass at the AGM. Neither resolution can be passed without Hudson either voting in favour or abstaining. Even then, the second resolution (which is proposed as a special resolution) may require further votes from other shareholders in order to achieve the requisite majority.
The resolutions detailed in the GM Notice will be proposed at the General Meeting of the Company to be held in the Boardroom, Consortia Secretaries Limited, 3rd Floor, Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ, Channel Islands at 9.30am London time on Monday, 22 October 2018.
The resolutions to be proposed at the General Meeting comprise:
1. an ordinary resolution authorising the directors of the Company for the purposes of Article 2.3 of the Company’s articles of association (the “Articles”) to allot relevant securities (as that term is defined in the Articles) in respect of up to an additional one thousand, five hundred million (1,500,000,000) ordinary shares;
2. subject to the ordinary resolution numbered (1.) having been duly adopted, a special resolution, in the context of the Company’s ongoing requirement for funding to develop projects, pursuant to Article 2.10 of the Articles dis-applying the pre-emption provisions in Articles 2.4 to 2.8 of the Articles in relation to the allotment and issue of further equity securities (as that term is defined in the Articles) for cash up to a maximum number of one thousand, five hundred million (1,500,000,000) ordinary shares.
Copies of the full GM Notice and the Form of Proxy for Shareholders are available from the Company’s website www.bellzone.com. Shareholders who wish to vote should download the Form of Proxy and complete it in accordance with the notes which form part of the Form of Proxy.
Copies of the GM Notice and the Form of Proxy for the General Meeting will be posted to Shareholders who have requested the Company to continue to send copies of communications to Shareholders by post, today, 3 October 2018.
Notice of Investor Conference Call
All interested investors are invited to an update call at 9.00am GMT (10.00am British Summer Time) on Friday, 12 October 2018, where management will provide updates on Bellzone’s business and address questions Shareholders may have prior to the General Meeting. Investors are invited to register their interest to attend the call by email to firstname.lastname@example.org by 5.00pm GMT on Wednesday, 10 October 2018 to receive the dial-in details.
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