Olma Investment Group Fails to Put Forward an Alternative Offer – Instead makes Unrealistic Demands which First …
All amounts are in US dollars unless otherwise noted.
TORONTO and JOHANNESBURG, May 28, 2012 /PRNewswire/ - First Uranium Corporation (FIU.TO), (JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Company") today received a demand from Olma Investment Group and other dissident shareholders to renegotiate the terms of agreed asset sales and to seek concessions from debt holders.
"Olma and its partners have repeatedly promised a concrete alternative to our restructuring plan," John Hick, First Uranium's lead independent director, said. "Instead of putting forward a viable stand alone proposal as Olma has been promoting, they have only come forward with a set of unrealistic demands that have zero chance of being accepted by the parties involved."
As has been previously communicated, First Uranium's board of directors first announced on March 2, 2012 that it had approved the sale, through two subsidiary holding companies, of its Mine Waste Solutions operation and the Ezulwini mine, to AngloGold Ashanti Ltd. and Gold One International Ltd. for $335 million and $70 million respectively.
In advance of that announcement, First Uranium and its advisors contacted approximately 20 potential buyers around the world and only AngloGold and Gold One emerged as bona fide bidders. No other credible offer has been received since the announcement of the two transactions.
First Uranium shareholders are due to consider the proposed transactions at a special meeting on June 13, 2012.
Olma and others claiming to represent 18 per cent of First Uranium's outstanding common shares proposed the following concessions in an email addressed to the Company and dated May 27, 2012:
A full copy of Olma's email follows below.
Mr Hick said: "After an exhaustive process assessing all available alternatives and based on our discussions over the past five months, and their respective reconfirmations today, we know that neither AngloGold nor Gold One are willing to reopen negotiations with a view to paying a higher price for these assets. Given our extensive interaction with the debt holders, which resulted in the compromises set out in the Company's management information circulars, the idea of these parties and, in particular, the secured debt holders, agreeing to the proposed concessions is equally implausible."
He added: "The dissidents' demands and lack of an alternative "concrete proposal" as promised last week, confirm they have no better alternative to offer than the plan which has already been approved by First Uranium's board. Shareholders need to understand that because of the Company's financial situation, if the negotiated transactions are voted down, there is a real possibility that shareholders may be left with nothing, as the Company faces significant liquidity constraints with impending debt maturities on June 30, 2012 and March 31, 2013. As previously disclosed, Mine Waste Solutions and Ezulwini also face challenges, including significant funding requirements."
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Olma Investment Group Fails to Put Forward an Alternative Offer - Instead makes Unrealistic Demands which First ...