PuriflOH is hatching plans to admit a new “strategic” investor.
The investor has yet to be identified – at least publicly – but directors may have more to say at the AGM to be held in South Melbourne on November 23.
The meeting will be the last to be chaired by Steve Morris.
After the meeting, Mr Morris will pass the chairmanship baton to Bill Parfet and then - along with Steve Annear and Lucia Cade - resign from the Board.
If there is to be a new strategic investor, Mr Parfet seems set to be the key deal-driver.
Clues to the intriguing possibility are to be found in PO3’s Notice of Annual General Meeting posted last week.
Directors reveal they’ll be seeking approval to issue new shares up to 10pc of the current issued capital of 31.5m shares (Including 140.542 shares to be issued to directors in lieu of cash director fees).
A Special Resolution to allow use of spare placement capacity is not new for PuriflOH.
Shareholders approved a similar resolution at last year’s AGM.
As it happened, directors did not tap the extra capacity.
But what is new – and especially noteworthy – is the wording in Clause (ii) of the proposed resolution:
“The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes:
(i) as cash consideration, in which case the Company intends to use funds raised for ongoing working capital to further advance the Company’s Free Radical Generator technology; or
(ii) to introduce a strategic investor to the Company’s register, in which case the funds raised through such introduction would be used in a manner consistent with Section 4.2 (f)(i) above.”
Section 4.2 (f)(i) is new…and important. It says:
"The recipients of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined”
"However they could consist of current shareholders or new investors (or both).
"None will be “related parties” of the Company. "
I assume “related parties” include Bill Parfet and new directors Carl Le Souef and Professor Pravansu “Jewel of India” Mohanty.
It would seem from this that directors would prefer to widen the current shareholder spread, a move that may help improve market liquidity.
Another clue re purpose of an issue:
“…it is likely that the recipients under the 10% Placement Capacity will be vendors of…new resources, assets or investments.”
In other words, any new strategic investor is likely to receive shares as part of a takeover deal.
What could be the scrip value of any takeover? Based on PO3’s current share price – approaching $20m.
(20min delay)