Global Iron to appeal against ASX decision

ASX listed Global Iron (ASX: GFE) announced on 9 February 2010 a transaction to acquire private company, African Petroleum, which at completion will hold the rights to two highly prospective oil and gas exploration blocks off the coast of Liberia, West Africa, in a transaction valued at approximately A$500 million.

The transaction is subject to a number of conditions being satisfied including the receipt of Global Shareholder approval, and the company successfully completing a capital raising of at least A$130 million and up to A$230 million.

The capital raising was to be undertaken by way of a placement of shares at $0.55 per share to raise up to A$230 million. The company has to date received firm commitments of approximately A$130 million subject to a long stop date of 30 April 2010.

A Notice of Meeting was lodged with ASX for review on or about 10 February 2010 in respect of the transaction.

On 26 March 2010, ASX advised the company that it will not admit Global to admission and quotation if it completes the transaction due to concerns over the influence of a substantial shareholder.

Prior to the company receiving ASX’s decision, it provided to ASX a number of additional undertakings in relation to the conduct of the company, particularly in relation to corporate governance.

The company has specifically advised ASX that it will form a continuous disclosure committee, of which a substantial shareholder Frank Timis will not be a member, and that Timis will not be responsible for determining if an announcement will be required or approving an announcement for release.

The company said the A$130 million in firm commitments received to date are from leading UK based institutions, and are an indication of the support from institutional investors as to Timis’ involvement with the company post completion of the transaction.

Following the ASX announcement on 9 February 2010, Global’s share price increased from around 35 cents to above 50 cents and has remained over 45 cents.

The company requested ASX to keep the company in suspension from the date of the announcement until the shareholders meeting which was denied by ASX.

Global Iron said it is of the view that ASX does not have the discretion or the authority to make this decision and has appealed ASX’s decision on that basis.

The Board has requested that Shareholders remain patient while the full impact of ASX’s decision is determined.

As more information becomes available to the company, it will advise Shareholders accordingly. The Board has requested ASX to allow the company to remain in suspension pending the outcome of the appeal.

http://www.proactiveinvestors.com.au/companies/news/6224/global-iron-to-appeal-against-asx-decision-6224.html