AUS: Dromana share offer gets green light
Dromana Estate has had its revised prospectus accepted by the Australian Takeover Panel. The modified prospectus clears the way for Dromana to push ahead with its share issue.
The wine company had encountered resistance to its initial share issue, with some shareholders claiming that directors would gain control of Dromana at a deflated price.
The offer sought to raise A$1.5m from the issue of 22,382,705 shares at A$0.07 each. A shortfall facility was in place and the directors underwrote the offer to A$1m. The directors also retained discretion to reject shortfall applications if the shortfall was insufficient to meet applications.
The new prospectus includes the termination of the underwriting agreement, the removal of the directors' retention of discretion to reject shortfall applications, giving shareholders the right to apply for up to 300,000 each, on the basis that if there were insufficient shortfall shares, the applications would be scaled back pro rata, and the inclusion of additional information on Dromana's most significant asset, the Tuerong Park Unit Trust.
Dromana is scheduled to hold an EGM on 9 March to vote on the removal of three directors in light of the protests. Shareholders will vote on a motion to remove chairman Richard Green and directors David Craig and Geoff Bell from the board of directors. The rebel shareholders have also called for Simon Maher and Jennifer Hempton to be appointed to the board.
Some investors have also claimed that the three directors were guilty of a conflict of interest as they sit on the Dromana board and Jinalec, the trustee company of Tuerong Park Unit Trust. The trust leases Dromana the Tuerong Park winery and vineyards and has provided short-term financial help to Dromana in recent months. Dromana said the shareholders accusations were "unsubstantiated".
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