Havilah Resources Ltd. said Sept. 12 that shareholders owning 76.41% of the company voted against a proposed investment of up to A$100 million by Sanjeev Gupta-led GFG Alliance Ltd.'s OneSteel Manufacturing Pty. Ltd., or SIMEC.
Havilah's technical director and 19.22% shareholder Chris Giles voted against the resolution despite having supported it earlier, while almost 60% of the individual shareholders voted in favor of the proposal. Giles indicated his plans to vote against the investment resolution late the evening of Sept. 9, the company said.
GFG notified Havilah that it reserves the rights to recover costs incurred since May 1 against the company and Giles as the board had previously unanimously supported the deal, according to the release.
The company said it has not received any alternative offer, and its pro rata rights issue of A$5 million at 15.4 Australian cents will also not proceed.
The GFG investment, comprising a committed staged equity investment of A$50 million and a further A$50 million in conditional or discretionary funding over about three years, was expected to fully fund Havilah's work programs at its Maldorky, Grants and Grants Basin iron ore assets and the Mutooroo copper-cobalt project in South Australia. GFG had wanted to use the projects to potentially feed its planned landmark Next-Gen steel plant and its copper smelter project in Whyalla.
In August, Havilah asked the Takeovers Panel to restrain co-founder and former director Keith Robert Johnson — who is against the deal — and "certain other" shareholders from voting on the transaction Sept. 12, claiming they obtained backing from 38.51% of Havilah's investors by means that contravene ASX rules; however, the Takeovers Panel said it would not investigate the claim.
At the time, an analyst with knowledge of Havilah stock said that given the company's cash position, balance sheet and limited sources of funding, it would have to take the SIMEC deal if it wanted to continue as a going concern.
The company had A$3.8 million in the bank as of July-end, with A$2.5 million drawn on a standby facility, resulting in a net cash position of A$1.3 million.
