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VYSARN LIMITED — Capital/Financing Update 2020
May 26, 2020
66029_rns_2020-05-26_bb4846cf-86e5-4608-a842-0bbfd4868879.pdf
Capital/Financing Update
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ASX:VYS
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27 May 2020
VYSARN ENTERS INTO ASSET SALE AGREEMENT TO INCREASE WATERWELL DRILLING ASSET FLEET
The Board of Vysarn Limited ( ASX: VYS ) ( Company ) is pleased to announce that the Company's wholly owned subsidiary Pentium Hydro Pty Ltd ( Pentium ) has entered into a binding Asset Sale Agreement (ASA) for the acquisition of two (2) previously owned dual rotary drill rigs.
Under the agreement, Pentium will purchase a Foremost DR12 and a Foremost DR24 for AUD $2.1m from the business trading as Southern Rig Hires in New Zealand. Completion is subject to Pentium being satisfied with a final inspection on the rigs at the delivery location, and Pentium will have responsibility for transporting the rigs to Western Australia. The payment terms of the agreement require Pentium to make an upfront payment of $500,000 on completion with the balance of $1.60m (plus interest) to be paid over a 24 month period. The deferred payment to the vendors will be secured against the two rigs.
The acquisition of the two rigs is a further progression of the Company’s growth strategy to pursue organic growth opportunities and will ensure that Pentium owns and operates one of the largest dual rotary rig fleets in Australia specialising in hydrogeological drilling. Post the acquisition, Pentium will own 12 drill rigs. The acquisition of the two rigs enables management to capitalise on the early success of Pentium Hydro and will supplement the existing fleet providing the required scale for the Company to achieve its vision of Pentium becoming the preeminent service provider in the hydrogeological drilling space.
As released on the ASX on 18 May 2020 (further details below) the Company announced its intention to conduct a non-renounceable rights issue to raise approximately $4.0m to provide the Board with the optionality to either execute growth strategies, to pay down debt or to provide valuable cash reserves should the core business see a contraction in work in the short to mid-term. Following execution of the ASA, some of the funds raised via the rights issue will also be used to satisfy the upfront payment under the ASA and for any capital expenditure required to bring the two rigs into work readiness prior to deployment. A number of potential contract opportunities for the rigs have already been identified by management.
Vysarn Limited | ABN: 41 124 212 175 | ACN: 124 212 175 | 108 Outram St, West Perth, WA 6005 | PO Box 1974, West Perth WA 6872 T +61 (0) 8 9486 7244 | F +61 (0) 8 9463 6373 | E [email protected] | vysarn.com.au
Pentium currently has 8 of its 10 rigs under contract and will have an additional 2 rigs to deploy on completion of the rigs acquisition. The business continues to field multiple enquiries regarding rig availability to provide water well services in the resource sector. Management is also diligently pursuing opportunities to qualify as a preferred contractor for Tier 1 clients which together will provide expanded opportunities for the full deployment and utilisation of our entire 12 rig fleet in FY2021.
NON-RENOUNCEABLE ENTITLEMENT OFFER
The Company announced on 18 May 2020, that it is undertaking a 3 for 10 nonrenounceable entitlement offer of up to ~89.3 million fully paid ordinary shares at an issue price of $0.045 per share to raise up to approximately $4 million ( Offer ).
The Offer price of $0.045 per share represents a discount of 18% to the Company’s last closing price on the ASX on 15 May 2020 of $0.055.
The Offer will be conducted pursuant to a prospectus to be lodged by the Company with ASIC and the ASX on or around Thursday, 28 May 2020 ( Prospectus ) and will be open to all shareholders with a registered address within Australia or New Zealand who hold shares on the record date of Wednesday, 3 June 2020. The Offer will open on Tuesday, 9 June 2020 and will close on Tuesday, 23 June 2020 (unless extended).
The Company also intends on seeking shareholder approval at a general meeting to permit certain directors to participate in any shortfall to the Offer. An indicative timetable for the Offer and the shareholder meeting is set out at the bottom of this announcement.
OFFER INDICATIVE TIMETABLE
An indicative timetable of key dates in relation to the Offer is detailed below.
| Event | Date |
|---|---|
| Announcement of Offer | Monday,18 May2020 |
| Prospectus lodged with ASIC | Thursday,28 May2020 |
| Despatch of Notice of Meetingto Shareholders | Friday,29 May2020 |
| Ex Date | Tuesday,2 June 2020 |
| Record Date(5:00pm WST) | Wednesday,3 June 2020 |
| Prospectus despatched to Eligible Shareholders and Offer opens |
Tuesday,9 June 2020 |
| ClosingDate(5:00pm WST) | Tuesday,23 June 2020 |
| Shareholder General Meeting | Monday,29 June 2020 |
| Issue Date | Tuesday,30 June 2020 |
| Despatch of holding statements and normal tradingof new shares on ASX commences |
Wednesday,1 July2020 |
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The ASX announcement has been authorised for release by the Board of Vysarn Limited.
For further information:
James Clement Managing Director Vysarn Limited Telephone: +61 8 9486 7244 Email: [email protected]
Kyla Garic Company Secretary Vysarn Limited Telephone: +61 8 9486 7244 Email: [email protected]
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