THE EXPLORATION company Minmet has written to shareholders ahead of an extraordinary general meeting (egm) which will take place next Friday.
The meeting was requisitioned by a group of shareholders who have raised questions relating to certain transactions which occurred between August 2007 and January 2008.
Among the transactions are:
• The payment of $4.35 million by way of refundable deposit to Carbon Energy Investments Limited to secure the purchase of Alaska Oil & Gas Resources Limited;
• The payment of $6 million by way of refundable deposit to Tucumcari Investments Limited for an option to acquire Tucumcari Exploration;
The commitment of loans by Minmet totalling $3 million to be advanced to Tucumcari Exploration to fund essential expenditure to preserve the value of Tucumcari Exploration and its assets.
Shareholders had also queried cross-shareholdings by Minmet chairman Peter Maddocks, who also has a 5 per cent beneficial interest in Carbon Energy Investments.
In its letter, Minmet's board said the transaction between Carbon Energy Investments Limited and Minmet did not constitute a related party transaction under the AIM rules because any commonality of either management or ownership between Carbon and Minmet is below the requisite threshold to give rise to a related party relationship under the rules.
It also disclosed that Mr Maddocks is the sole director and registered shareholder of Tucumcari Investments Limited.
It said he holds these shares in trust for a number of beneficiaries but it was not obliged, nor at liberty, to disclose the ultimate beneficial ownership of Tucumcari Investments Limited, save that Mr Maddocks's beneficial ownership is 2 per cent.
The board said it had agreed to the returnable deposit to secure the purchase of Alaska Oil & Gas Resources because it felt at the time that the transaction represented an attractive opportunity to acquire exploration assets at a substantially discounted price, and under the AIM rules, the company was not required to seek advance shareholder approval.
The board's letter also said the advance of $6 million to Tucumcari Investments Limited was also tendered to allow Minmet the time to carry out full due diligence, which was normal commercial practice.
The board also announced a revised strategy for the company which will see it revert to its incubator status.
Minmet said it would arrange for the spin-off and separate listing of Tucumcari Exploration and secure the recovery of the returnable deposits advanced to Carbon Energy Investments Limited and Tucumcari Investments Limited and the loans advanced to Tucumcari Exploration through either the spin-off strategy, or by enforcing the company's security.
