GRAM subsidiary seeks spill of Highlands’ Board. Highlands urges shareholders to take no action.
Highlands Pacific Ltd (ASX:HIG) has received notice from PanAust Ltd (a wholly-owned subsidiary of the Chinese state-owned Guangdong Rising Assets Management Co Ltd – GRAM) that it is requisitioning a special meeting of Highlands Pacific Ltd to remove four of the Company’s five non-executive directors and appoint three GRAM subsidiary nominees.
PanAust has requested the resignations of Chairman Ken MacDonald, newly appointed director Ron Douglas, independent director Mike Carroll and independent director Dan Wood.
PanAust holds 13.9% of Highlands, and is a joint venture partner with Highlands in the proposed Frieda River project in Papua New Guinea. Highlands’ directors, who are required by the notice to convene a special meeting of the Company to consider the proposal, urge shareholders to take no action.
The Company’s present strong belief is that replacement of four of the existing five non-executive board members with the PanAust nominees would not be in the interests of the other shareholders of Highlands, who number over 7,500.
Mr MacDonald said the PanAust proposal effectively amounted to a takeover of Highlands by PanAust without offering to acquire any shares, let alone with an appropriate premium.
"It is clear that a PanAust-dominated board would be at risk of operating in the interests of GRAM, rather than in the interests of all of our shareholders," he said.
"It is important for shareholders to be aware that Highlands is currently in dispute with PanAust regarding the funding and methods of progressing the Frieda River project. Highlands remains of the view that the PanAust approach to the project is suboptimal, and we have been urging it to adopt a different course of development that would generate better returns and reduced risks for our 7,500 shareholders. It also is our view that PanAust has failed to complete the Frieda River feasibility study to the standard required under the joint venture agreement," Mr MacDonald said.
"PanAust’s actions are clearly related to this dispute," he said.
Shareholders will be receiving a notice of meeting with additional material shortly.
