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WA business news

Strike, Orion spin-off Uranium assets in $6m IPO
19-February-07 by Edited announcement

Perth-based investment company Orion Equities Ltd (formerly Central Exchange) and resources explorer Strike Resources Ltd have announced plans to spin-off their uranium assets in a $6 million IPO.

The new company, Alara Uranium Ltd, will sell 24 million shares at 25 cents each to raise $6 million, allowing for $4 million in oversubscriptions.

Strike will receive 28.2 million shares at an IPO price of 25 cents in exchange for its uranium tenements in the Northern Territory, Western Australia and Peru.

Strike shareholders holding over 5,000 shares will receive a priority entitlements to subscribe for up to 16 million shares on a pro-rata basis, with a further entitlement for 6 million shares if the company accepts oversubscriptions.

This would equating to a one for four entitlement (three for eight with oversubscriptions) for shareholders.

Assuming full oversubscription, Strike could hold up to 36 per cent of Alara's total issued share capital. Strike intends to return 16 million Alara shares to Strike shareholders within six months of listing.

Orion, which holds a 25 per cent interest in certain Strike uranium tenements through its subsidiary Hume Mining NL, will receive 6.25 million shares in Alara as a result, as well as a priority entitlement to subscribe for up to 2 million shares.

The IPO will leave Orion holding 7.76 per cent of Alara if it does not take up its priority entitlement, with 10.25 per cent if it does.

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