LONDON (Alliance News) - Sefton Resources Inc shares rose on Tuesday after it said it has bowed to pressure from certain shareholders by proposing to oust and replace the majority of its board.
However, the company now faces the risk of its shares being suspended as its nominated adviser will resign if the proposed board changes are approved by shareholders.
Sefton shares rose 27% to 0.0760 pence per share on Tuesday morning.
Earlier in September, Sefton received a requisition from a group of shareholders including former Interim Chairman Daniel Levi for an extraordinary general meeting to remove the entire board of the company apart from Executive Chairman Jossy Rachmantio.
The requistioners were seeking for Non-Executive Directors Tom Milne and Keith Morris and Chief Financial Officer Raylene Whitford to be removed from the board. Whitford left her post for "personal reasons" last week and on Tuesday, Sefton said Milne and Morris have been removed from the board.
Levi, alongside the other requisitioners Christopher Williams and Charnjit Matharu, who collectively hold an 11.29% interest in the company, also called for Sefton to appoint Clement Chambers as interim chief executive officer and Michael Hodges as a non-executive director of the company.
On Tuesday, Sefton confirmed Chambers and Hodges have been appointed in those desired roles following discussions with Chairman Rachmantio. Chambers and Hodges are co-founders and CEO and executive chairman, respectively, of financial information website ADVFN PLC.
As a result of the board changes, Sefton said the requisition from the three shareholders has been withdrawn, however those changes will still require shareholder approval which will now be sought at the company's annual general meeting, the date of which will be announced shortly.
"It has been agreed by the board and the proposed directors (Chambers and Hodges) that they will jointly progress the appointment of the proposed directors to the board and the concurrent resignations of Mr Milne and Mr Morris, and that these changes to the board will occur in October 2015," said the company in a statement.
However, when the requisition was filed earlier in September, the company's nominated adviser, Allenby Capital Ltd said it would resign if the proposed board changes took place and on Tuesday, Sefton confirmed that Allenby will resign if shareholders approve the proposed board changes at the annual general meeting.
Under AIM rules, Sefton shares would be automatically suspended if Allenby Capital resigns, and then Sefton would have one month to source a new nominated adviser to replace Allenby Capital before its shares are cancelled.
"Following consultation with the board, the company's nominated adviser, Allenby Capital Ltd, has informed the board that while it will continue to act and support the current board during this process, but will resign at the same time as the board changes. The proposed directors have introduced a prospective replacement nominated adviser and the board and Allenby Capital Ltd will work constructively to assist them in their required due diligence under the AIM Rules," it said.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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