LONDON (Alliance News) - Oilex Ltd on Thursday said trading has been suspended in its Australian-listed shares pending the release of an announcement about actions the company understands have been started against it by Zeta Resources Ltd in the Federal Court of Australia.
On Wednesday, Oilex said Zeta had accused the company of failing to "disclose material information" prior to Zeta investing in the company in July.
Under an agreement between the companies, Zeta was to subscribe for AUD4.2 million of 20-year, zero-coupon unsecured convertible loan notes, convertible into Oilex shares at Zeta's option at any time. That was subject to a conversion price of AUD0.0418 per share, by no later than Wednesday this week. In addition, Zeta was to subscribe for 124.0 million new shares at the same price, to enable the issue of those shares to be settled by no later than Thursday.
"As at the date of this announcement, Zeta has failed to settle the subscription for the convertible notes. Oilex will be considering, together with its external legal counsel, the remedies available to it arising out of Zeta's failure to settle the convertible notes," Oilex said on Wednesday.
Zeta currently owns 10.3% of Oilex and that had been set to rise to 19.6%.
"Whilst Zeta has at this stage only provided limited information to the company regarding the basis of these allegations, Oilex considers them to be without merit and they will be vigorously defended," Oilex said on Wednesday.
On Thursday, Oilex said the halt on trading in its Australian shares would remain in place until it is able to make an announcement on the dispute.
Shares in Oilex were down 15% to 0.467 pence on Thursday in London, after the stock had lost 61% of its value on Wednesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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