AVZ (ASX) Ann: Notice of General Meeting/Proxy Form

Originally posted by Scarpa: ↑

@Deboss, as I cannot link your post I am replying to right not (HC is down by thelooks of it in that regard) I am going to put this link here because the sentence below appears inconsistent with the comment provided to you unless of course Dathcom has less than 3 shareholders hence not requiring a BOD - https://www.hg.org/legal-articles/incorporating-a-commercial-company-in-the-democratic-republic-of-congo-under-ohada-law-30719:
"A SA can be managed either by a managing director or by a board of directors. The key determinant as to which form of management is adopted is the number of shareholders the company has; a company with three or more shareholders must have a board of directors. The guidelines for the management of an SA are outlined in the Uniform Act."

So the question becomes is one of the three SHs in Dathcom ultimately exiting in due course?? I would be surprised if that happens in the next few months to one year, notwithstanding clause 1.2 (g):
"Subject to the terms of the Subscription Agreement, Yibin Tianyi agrees, for a period of 12 months from the Execution Date, not to acquire, and to procure that none of its associates and related bodies corporate aquire, an aggregate relevant interest of more than 19.9% in the Company, other than with the approval of the Board."

The above shouldn't be read as speculation of TO, as suspect most of the clauses in the Agreement are pretty stock standard in that if you enter into an Agreement you don't want to be used as a pawn so as to be trumped by someone else IMO. The Agreement per se is illustrative of the difference in the power base of Tianyi (backed essentially by CATL) to that of AVL IMO.

For others, if want to know difference between SAS and SA this link helps too:
https://www.healyconsultants.com/democratic-republic-of-congo-company-registration/setup-llc/

@JB1975 the way I have read Section 1.2, given the agreement Subscription Agreement, IMO was implemented on 11 November 2019 is AVZ cannot talk to any other party for 84 days (until end January when the Agreement must be executed or it lapses).

Clause 1.2 (c) (iv) specifically states: "the Company must not, and must procure that none of its authorised persons, directly or indirectly enter into, continue or participate in any communication, negotiations or discussions with any other person regarding Competing Transaction....."

The key word is "participate". If someone lodges an alternate proposal, AVZ is not allowed to participate in the discussions with those lodging the alternate proposal. In other words a competing "CR bid" would have to be communicated to the market only - that is AVZ by law would need to communicate it to the market but then cannot participate in the discussions btw - but do no more than that.

If an alternate CR bid is lodged prior to 3 January SHs might be influenced in how they vote, but I see the above as essentially a hypothetical anyway given AVZ's selection of Tianyi is sending a message to market that AVZ's resource is likely to become either i.) Chinese destination exports or ii.) a Chinese owned resource. The key question is whether in due course AVZ will be able to get a non-Chinese player on its books, because when it does then having competing interests (European and Chinese) would allow AVZ IMO to extract the maximum benefits available to SHs from the development of the resource..

It is a nice discussion to have, but IMO suspect there will not be another proposal from another entity prior to end January 2019, or before the 3 January SH meeting. As SHs, simply need to decide whether you want Tianyi onboard or not by voting. My gut feel is it is a done deal already regardless of what I think, and what I am thinking is still why the extent of this CR raise at this time given the funds we already have - $5.7 million at the end of last quarter. The benefit I see from the deal is a CATL related/affiliated party coming into the books and one we could have future Offtake Agreements with, but the cost being more Chinese control and what that means in a Chinese collusion context on SP (were that to occur) and the fact we don't have a major non-Chinese battery or hydroxide producer on the registry.

I think management need to rein in their pay packets or have performance shares better aligned to metrics as well. But that is another discussion.

All IMO IMO

Expand

" @Deboss, as I cannot link your post I am replying to right not (HC is down by thelooks of it in that regard) I am going to put this link here because the sentence below appears inconsistent with the comment provided to you unless of course Dathcom has less than 3 shareholders hence not requiring a BOD - https://www.hg.org/legal-articles/incorporating-a-commercial-company-in-the-democratic-republic-of-congo-under-ohada-law-30719:

"A SA can be managed either by a managing director or by a board of directors. The key determinant as to which form of management is adopted is the number of shareholders the company has; a company with three or more shareholders must have a board of directors. The guidelines for the management of an SA are outlined in the Uniform Act."

[snip]

For others, if want to know difference between SAS and SA this link helps too:
https://www.healyconsultants.com/democratic-republic-of-congo-company-registration/setup-llc/

"

Scarpa in your second link (the healyconsultants one) is a statement that seems less contradictory to what Deboss said he was told than your above quote.

"While it is possible to appoint a single director, the appointment of a management Board including three members is customary". "Customary" does not equate to "must have".

I'd gotten in touch with Leonard too. And received something similar but not identical to what Deboss reported getting back. So I thought it was possible Deboss might have mixed up the message or that he might have been told something slightly different by Leonard if he'd asked different questions or if Leonard was refining his story or improving his explanation. Leonard got back to me less than an hour after Deboss's post reporting what Leonard had told him hit the HotCopper message board. If the healyconsultants link has a better interpretation that the first link and a BOD is only customary and not a must have then Deboss could have been accurately reporting what Leonard told him - which would be my preferred explanation. In any case your second link seems to somewhat contradict the "a company must have a board of directors" statement in your first.

By the way in the same communication I got I got confirmation that 1.2(C) is currently in effect.