Mysterious disappearing rights issue rocks Kasbah Resources...

Mysterious disappearing rights issue rocks Kasbah Resources

• BRIDGER CARTER, SCOTT MURDOCH
• The Australian
• 27 March

First it was The Case Of The Faulty Expert’s Report. Now it’s the Mysterious Disappearing Rights Issue.

Tin minnow Kasbah Resources continues to generate more than its fair share of drama, more than seven months after it announced a deal to merge with Asian Mineral Resources.

That deal, which would have seen Swiss-based private equity fund Pala Investments emerge with a dominant stake in Kasbah, was all set to go ahead until a group of plucky smaller shareholders led by Melbourne financial adviser David Willis found some critical flaws in the independent expert’s report.

After that deal was scrapped, Pala returned with a commitment to take a 19.9 per cent stake in Kasbah through a $3.7m placement at 2.7c per share. When announcing the revised Pala deal back in December, Kasbah said it also intended to offer a 1 for 6 renounceable rights issue to raise up to $2.7m at 2.3c a share with Pala offering to underwrite all or part of the raising.

The underwriting could have allowed Pala to move beyond 19.9 per cent if shareholders didn’t take up their entitlements.

Kasbah said at the time that it expected to launch the rights issue in early 2017 and close it before mid-March. Those targets have since come and gone.

Data Room can reveal that Mr Willis wrote to the Kasbah board in February offering to underwrite the entitlement offer on the same terms, but with no fees or conditions. It’s all been silent on the entitlement offer front since.

The situation at Kasbah has also caught the eye elsewhere. Correspondence from the office of Kelly O’Dwyer, the Minister for Financial Services, obtained by Data Room confirms the minister has asked the Australian Securities and Investments Commission for a briefing on events at Kasbah.

Kasbah, which is also backed by the World Bank, owns the Achmmach tin deposit in Morocco, which is considered one of the few development-ready tin projects on the table.