Verdant Minerals Ltd.'s independent board recommended an offer by London-based private equity firm CD Capital Natural Resources Fund III LP to acquire a 67% stake in Verdant for about A$40.5 million, or 3.2 cents per share.
The offer price represents a 113% premium to the closing price of Verdant's shares on March 8 of 1.5 cents per share, making the proposal accretive to Verdant shareholders, the company said March 11.
Verdant also said the deal will help advance its Ammaroo phosphate project in Australia's Northern Territory, as raising the capital required for its development is highly unlikely to be raised from its shareholders.
Washington H. Soul Pattinson & Co. Ltd., owner of a 33% stake in Verdant not covered by the deal, intends to approve the proposal.
Verdant shareholders will meet on June 5 to vote on the scheme, with the target implementation date of June 24.
In connection with the deal, Verdant secured a short-term loan facility from CD Capital, which will advance A$800,000 in three tranches to fund deal-related costs and for Verdant's general working capital. The facility has an interest rate of 6% per annum and will mature in 12 months.