Formation of New Guernsey Hol

RNS Number : 6460Q

Obtala Resources PLC

06 August 2010

 

For immediate release

6 August 2010

OBTALA RESOURCES PLC ("Obtala" or the "Company")

New Holding Company

Obtala announces that it will today post documents to shareholders in relation to the proposed creation of a new group holding company incorporated  in Guernsey, Channel Islands.

The new holding company will be called Obtala Resources Limited("New Obtala"). 
An application will be made for New Obtala's shares to be admitted to trading on AIM, and New Obtala will retain the same ticker code. Application will be made for the admission of Obtala's existing shares on AIM to be cancelled and cancellation is expected to take place on 17 September 2010. Following the transaction, shareholders in Obtala will own the same number of shares in New Obtala.

The new group structure will be achieved through a High Court approved scheme of arrangement under sections 895 to 899 of the Companies Act 2006 ("the Scheme"). There will be no substantive changes to corporate governance and investor protection measures. In particular, New Obtala intends to comply with the UK Corporate Governance Code to the same extent that Old Obtala does currently.  Following the Scheme, New Obtala will own the entire issued share capital of Obtala.

Obtala has augmented its pure mining exploration and development activities with complimentary investment activities, focusing on global opportunities in the natural resources sector. This has enabled Obtala to take advantage of investments in undervalued resource assets and to exploit potential synergies and strategic alliance opportunities. All of the Company's mineral exploration and extraction assets are held outside of the UK, principally in Tanzania and Sierra Leone.

In recognition of the global nature of Obtala's businesses, the Obtala Board believes that the Obtala Group's future development will be assisted by:

• having an international holding company that facilitates flexibility in the formation of new subsidiary businesses with partners in jurisdictions globally; and

• increased international exposure at a board level at this time of significant structural change and opportunity globally.

In order to implement this, the Obtala Directors consider that the most appropriate structure is for Obtala to have a group holding company in Guernsey. Guernsey has been chosen because it meets the necessary commercial criteria, while also allowing continued settlement of trading in New Obtala's shares through CREST.

Following the implementation of the Scheme, the New Obtala Directors intend New Obtala to adopt the existing dividend and share repurchase policies of Obtala i.e. the New Obtala Directors do not have any current intention of paying dividends or buying back shares in New Obtala

The Scheme will not be implemented unless certain approvals are obtained, including the approval of the Scheme by the Obtala Ordinary Shareholders at a meeting convened by order of the High Court (the "Court Meeting"), the approval by the Obtala Ordinary Shareholders of certain resolutions required in connection with the Scheme at a general meeting (the "General Meeting") and the sanction of the Court. The resolutions to be proposed at the General Meeting will include a resolution to approve the cancellation of the admission of Obtala's shares on AIM. The Court Meeting and the General Meeting have been convened for 10.00 a.m. and 10.10 a.m. respectively on 31 August 2010.

Dealings in the shares of New Obtala  are expected to commence on 
17 September 2010.

Copies of the documents sent to shareholders today are also available on the Company's website www.obtalaresources.co.uk.

END

Contact:

Obtala Resources plc
Simon Rollason - Managing Director Frank Scolaro - Chairman www.obtalaresources.co.uk	[phone]
ZAI Corporate Finance Ltd
Ray Zimmerman/ Marc Cramsie/ Sarang Shah	[phone]
Threadneedle Communications
Laurence Read	[phone]

 

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