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SINGAPORE (Apr 17): Shares in Alliance Mineral Assets edged lower this morning after announcing on Monday night it plans to issue 13.25 million new shares valued at nearly $4.9 million to certain directors and executives including former CEO Tjandra Pramoko and wife and executive director Suen Sze Man who were both asked to step down earlier.
The value of the shares was based on last Friday's closing price of 37 cents at an exchange rate of $1 to A$0.983. The new shares represent 1.94% of the the enlarged issued share capital of Alliance Mineral.
As at 10.37am, shares in Alliance Mineral were trading at 36 cents, 1.37% or 0.5 cent lower than its Monday closing price of 36.5 cents with nearly 970,000 shares traded.
According to the breakdown, Pramoko and Suen will each be entitled to 3.75 million shares worth about A$1.37 million ($1.39 million). After the completion of the issue, each will hold a 0.54% stake in the company from 0.67% previously.
In March, the board said Alliance Mineral's other substantial shareholders and key business partners no longer wanted to deal with the company as long as Pramoko remained as CEO.
Pramoko had “attracted a series of personal litigation which involves allegations of breaches of promises. These have raised questions of integrity,” the board added.
As for the others, Independent Non-Executive Chairperson Pauline Gately will receive 2.25 million new shares; Independent Non-Executive Directors Ong Kian Guan and Mahtani Bhagwandas will each receive 250,000 new shares; Company Secretary Fiona Leaw Mun Ni and Chief Financial Officer Shaun Menezes will each receive 1.125 million new shares while Project Director Tony Dominkovich will get 750,000 new shares.
Alliance Mineral says the proposed issue is made in lieu of compensation otherwise payable by the company in cash and is subject to shareholders’ approval at an extraordinary general meeting to be convened.
Last June, Alliance Mineral had engaged independent consultant The Reward Practice to review and advise the directors on aligning its remuneration terms with comparable Australian-listed mining companies as part of its human resource retention strategy.
"Taking into account the achievement of specific performance milestones such as execution of the joint venture agreement and off-take agreement and commencement of commercial production for Bald Hill Project, the board proposes to issue the compensation shares as part of the remuneration packages for these directors and executives for the financial year ended 30 June 2017," says Alliance Mineral.
This includes Pramoko and wife Suen, whom Alliance Mineral says, rendered services to the company for the preceding financial year ending June 30 2017.