consolidation details

3. CONSOLIDATION OF THE COMPANY’S ORDINARY SHARES
This Resolution seeks to consolidate the Company’s share capital in a ratio of 1 share for every 5 shares held.
If passed, this will result in the issued capital of the Company reducing from 913,206,877 ordinary shares to approximately 182,641,375 ordinary shares, assuming that there is no change in the Company’s issued capital of 913,206,877 shares prior to the date on which the consolidation takes effect. The exact number of shares post-consolidation is dependent on the extent (if any) of the adjustments required to deal with fractional holdings. As noted in the resolution, where a holding is not exactly divisible by 5, so that there is a fractional remainder, the fraction will be dealt with on the basis that the holding will be rounded to the nearest whole number except where the holding is less than 1 share, or the fraction is precisely is one-half, in which case the holding will be rounded up to the next highest number.
Individual holdings will be reduced in accordance with the consolidation ratio.
This proposal requires shareholder approval by ordinary resolution under section 254H of the Corporations Act.
The consolidation does not affect the amount of the Company’s assets or liabilities. Accordingly, it is reasonable to assume that, immediately after the consolidation, the Company’s overall market capitalisation should remain the same and that the market value of each holding should remain the same. Theoretically, a five-fold decrease in the number of shares outstanding should be offset by a commensurate five-fold increase in the market price per share. In reality, the actual affect on the per share market price will depend on a number of factors outside the control of the Company, including the impact on market perceptions and potential alterations in the range of market participants who
are interested in dealing in the Company’s shares, so that the market price following consolidation may be higher or lower than the theoretical post-consolidation price.
Compared to its peers listed on the ASX, the Company has an abnormally high number of shares on issue compared to its market capitalisation. The board believes that the share consolidation will establish a share price in a range that is more appropriate for a listed entity of the Company’s size.
It also believes that, when dealing with foreign governments, agencies and companies, a share price substantially lower than $1 creates a negative perception that is unhelpful to the Company’s ambitions.