SYDNEY, AUSTRALIA: Sovereign Metals Limited (ASX:SVM) intends to undertake a demerger whereby Sovereign’s Malawian graphite projects being the Nanzeka Project, Malingunde Project, Duwi Project and Mabuwa Project (Graphite Projects) are to be demerged through NGX Limited (NGX), a wholly owned subsidiary of the Company, permitting Sovereign to focus on the event of the Kasiya Rutile Project (Kasiya) whereas unlocking worth in its Graphite Projects for shareholders.
Sovereign proposes, topic to shareholder approval, to demerge the Graphite Projects via a spin-out of NGX and in-specie distribution of NGX fully paid ordinary shares (NGX Shares) to Sovereign shareholders by issuing one (1) NGX Share for each eleven (11) Sovereign shares (SVM Shares) held (Distribution), permitting Sovereign shareholders to retain publicity to the worth and upside of the Graphite Projects.
Upon completion of the Demerger, NGX intends to hunt admission to the official list of the ASX. NGX will undertake a capital elevating to fulfill the ASX admission requirements.
NGX would be the offeror of the NGX Shares under the IPO. A prospectus will be issued by NGX for the IPO capital elevating which will be made available when the NGX Shares are offered. Anyone wishing to purchase NGX Shares as a half of the IPO offer might want to full the application form that will accompany the prospectus.
The Demerger permits Sovereign Metals Limited to higher focus its efforts and resources on Kasiya and different primary rutile discoveries.
The Demerger will present shareholders with an curiosity in two companies – Sovereign and NGX. The Board believes a separate entity with a separate administration team focused on the Graphite Projects presents a greater prospect of delivering worth to Sovereign shareholders.