LONDON (Alliance News) - Chagala Group Ltd said it has issued a direction notice to TIPP Investments PCC after it failed to make an offer for remainder of the company's shares, or announced any intention to make one, after triggering an obligation to do so.
TIPP, a public investment fund, bought 3.0 million share or a near 15% stake in the company at the end of May at a price of USD1.85 per share. Under the company's articles of association, TIPP has become obliged to make an offer to holders of all of its issued shares at a price equal to at least the highest price it paid for the shares.
However, it has failed to extend that offer, nor announced plans to do so.
Following the acquisition it also received a letter from Eagle Resource Holdings Ltd and Typhoon Developments Ltd, in which they purported to have exercised rights to requisition a general meeting to, among other things, appoint three new individuals to the board.
Based on this letter, and some other correspondence, it has concluded that TIPP, Eagle and Typhoon, along with East Capital and Nautilus Fiduciary (Asia) Ltd, were acting in concert for the purposes of its articles of association. Therefore, this collective now holds shares of more than 30% of the company's voting rights, thus triggering the obligation to extend an offer.
As such, Chagala has served a direction notice to TIPP and the other shareholders, collectively representing a 40% stake in the company, with the effect of suspending voting rights attached to the shares they hold, as well as some other rights, including the right to participate in distributions.
Shares in Chagala were untraded Tuesday morning. They last closed at USD1.10.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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