GCM Resources Regulatory News (GCM)

30 Jun 2006 11:01

Asia Energy PLC30 June 2006 PRESS RELEASE 30/6/2006 ASIA ENERGY PLC (Incorporated in England and Wales under the Companies Act 1985 (as amended) with registered number 4913119) Project Update and Convening of Extraordinary General Meeting Project update Asia Energy Plc ("The Company") has established a world-ranking resource of 572million tonnes of thermal and semi-soft coking coal having obtainedenvironmental clearance to mine the coal by the most economically practicalmethod of open pit 'shovel and truck', and the Company has also submitted itsScheme of Development and Feasibility Study for the mine to the Government ofBangladesh. Plans are in place for the mine and its operations, for landacquisition, resettlement and water management and for transporting the coal tolocal and export markets. In accordance with the contract with the Government ofBangladesh, the Company is now waiting for formal approval to start mining andis confident that this will be forthcoming. Two independent consultants, SRK Consulting and URS Australia Pty Ltd, havereviewed the key aspects of the Project, being mining, environmental, social,logistics, transport and marketing and their reports will form part of a ProjectInformation Memorandum which the Company will distribute to the internationalbanking community shortly. The Company's plans remain on track to invest US$ 1.1 billion (before financecosts) to reach full production of 15 million saleable tonnes of coal per annumand to operate the mine for 30-plus years. Extraordinary General Meeting The Company is today announcing the convening of an Extraordinary GeneralMeeting to propose Resolutions to enable the Board to allot shares and to do sofor cash on a non pre-emptive basis. The Board remains of the view that the Project will be funded by a mix of debtand equity and, with this in mind and in anticipation of the approval of theScheme of Development and Feasibility Study for the Company's Phulbari CoalProject by the Government of Bangladesh, the Board and its advisers have beenreviewing the possibilities for funding the Project. The purpose of theResolutions is to enable the Board to have maximum flexibility and to be able toconclude a quick way forward to fund the development of the Phulbari CoalProject in a manner in which it believes is in the best interests ofShareholders. No formal decision has yet been reached on the amount of debt and equity to beraised or the way in which the Project will be financed. Discussions have takenplace with a number of interested parties and potential lenders during which thepossibility of equity participation in the Company has been raised eitheralongside, or as an alternative to, a placing of equity with investors. In putting forward the Resolutions, the Board will make the following commentsand undertakings: 1. The Resolutions will authorise the issue of up to 100 millionshares equivalent to approximately 67% of the enlarged issued share capital ifthe authority were to be utilised in full. 2. The value of 100 million shares at today's share price isapproximately US$600 million which reflects the absolute maximum that the Boardwould consider as an equity element for financing the Project, together with anamount of normal headroom. In practice and in current market conditions, theBoard believes that the equity financing element will be less than this amount.The Board also intends to utilise up to 5% of the authorities sought toincentivise existing and new personnel employed or engaged by the Company toassist in the further development of the Project. 3. If the authority were to be used in relation to a placing ofequity with investors on a non pre-emptive basis, the Board will seek to ensurethat existing institutional shareholders will receive preferential allocationsin any such placing. 4. As a UK company, Asia Energy is governed by the provisions of theCity Code on Takeovers and Mergers. Accordingly, no issue of shares will bemade which would result in a single shareholder or concert party holding 30% ormore of the issued share capital of the Company without a vote of independentshareholders being sought as required by the Code to waive the requirement ofsuch shareholder or concert party to make an offer for the whole of the sharecapital of the Company. 5. The Board will consult with its nominated adviser, JPMorganCazenove, on the terms and conditions of any issue utilising this authority. 6. Notwithstanding the authority being sought from Shareholders toallow for a non-pre-emptive issue of shares, the Board will keep under reviewthe possibility of an issue of shares on a pre-emptive basis. 7. The Resolutions, if passed, will be valid until the conclusion ofthe next annual general meeting. The Board will put forward similar Resolutionsfor further consideration by Shareholders at the next annual general meeting, onterms reflecting whether or not the current authorities sought have beenutilised in the meantime and any other changes in circumstances. An Extraordinary General Meeting is to be held at 10.00 a.m. on Wednesday 26July 2006 at the offices of Trowers & Hamlins, Sceptre Court, 40 Tower Hill,London, EC3N 4DX, notice of which will be sent out later today. Shareholderswill be asked to consider, and if thought fit, pass resolutions to grant theDirectors of the Company (i) a general authority pursuant to section 80 of theAct to allot shares and (ii) a power pursuant to section 95 of the Act to allotshares for cash otherwise than pro-rata to existing Shareholders. For Further Information: Gerard Holden Stephen BywaterChairman Chief ExecutivePh: 0778 550 3593 Ph: 0207 290 1630 Graham Taggart Cathy Malins or Annabel LeatherFinance Director Parkgreen CommunicationsPh: 0207 290 1630 Ph: 0207 493 3713 This information is provided by RNS The company news service from the London Stock Exchange