Global Cobalt Corp. (TSXV:GCO) announced that a strategic reorganization of its business components has been approved by its board of directors.
Global Cobalt Corp. (TSXV:GCO) announced that a strategic reorganization of its business components has been approved by its board of directors. The reorganization will see the company’s North American Werner Lake and Iron Creek projects spun out into a new company, while Global Cobalt will continue to hold the Russia-based Karakul and Altai sister properties.
Both companies will ultimately be separately listed, and shareholders will receive shares in the new company in proportion to their Global Cobalt holdings.
Transaction highlights include:
- Spin-out of New Energy Metals Company to Focus on M&A and Project Development in Battery Metals Projects as well as holding the current North American projects of Werner Lake and Iron Creek
- Global Cobalt will continue to hold those agreements associated with Karakul and the Altai Satellite projects in Russia
- Global Cobalt Shareholders Receive Shares of SpinCo on 1:1 basis to holdings in Global Cobalt
- Shareholder meeting scheduled June 11th, 2015 for holders of record of common shares of Global Cobalt as at 12:01 a.m. on May 7th, 2015 with the registrar and transfer agent of Global Cobalt
The press release also states:
The Company is undertaking the reorganization in order to facilitate the separation of Global Cobalt’s current business activities to reflect the different interests intended to be pursued by the restructured Global Cobalt and newly formed SpinCo.
The spin-out transaction should also maximize shareholder value by allowing the market to value SpinCo’s North American mineral exploration business independently of Global Cobalt’s project portfolio in Russia. In addition to allowing the Company to continue to focus efforts on securing and developing Karakul, the Company is confident that having a separately funded and managed mineral exploration business will accelerate development of Werner Lake and Iron Creek and give scope for new acquisitions in the energy metals sector.
It is intended that, as part of the reorganization, Global Cobalt’s current shareholders will receive shares of SpinCo by way of a share exchange, pursuant to which each existing share of Global Cobalt is exchanged for one ‘new’ share of Global Cobalt and one share of SpinCo. Warrant-holders of Global Cobalt will receive warrants of SpinCo, which are proportionate to, and reflective of the terms of, their existing warrants. The reorganization will be effected by way of a Plan of Arrangement (the ‘Arrangement’) under the Business Corporations Act (British Columbia), and must be approved by the Supreme Court of British Columbia and by the affirmative vote of 66 2/3% of Global Cobalt’s shareholders in attendance at a shareholders’ meeting.
Explaining the move further, Erin Chutter, president and CEO of Global Cobalt, commented:
The management and Board of Directors of Global Cobalt believe that the creation of two separate public companies, dedicated to the pursuit of their respective businesses, will allow each separate entity to focus their efforts and is an excellent opportunity for shareholders to maximize the value of their Global Cobalt holdings with additional investment choices and enhanced flexibility.