LONDON (Alliance News) - Oilex Ltd on Thursday said trading has been suspended in its Australian-listed shares whilst it evalauates documents it has recieved from Zeta Resources Ltd containing information about allegations made against the company 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.
Later Thursday, Oilex said: "Zeta has failed to settle the subscription for the deferred shares. Oilex will be considering, together with its external legal counsel, the remedies available to it arising out of Zeta's failure to settle."
Zeta currently owns 10.3% of Oilex and that had been set to rise to 19.6%.
Oilex also said it has been informed by Zeta that it has commenced legal proceedings against the company in the Federal Court of Australia, and on Wednesday Oilex claimed it had only be provided with "limited information" about the basis of Zeta's allegations, vowing to defend itself and calling the allegations "without merit".
On Thursday, Oilex said: "Zeta has also made an announcement on the ASX to notify the market of these proceedings. The proceedings have not yet been formally served on Oilex, although Oilex has received from Zeta copies of the documents which Zeta asserts have been filed at court."
Oilex is now evaluating the documents, but the halt on trading in its Australian shares will remain in place until further notice.
Shares in Oilex were down 29% to 0.389 pence on Thursday in London, after the stock had lost 61% of its value on Wednesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.