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  • ASF Group To Raise $3M For Working Capital 0 comments
    Sep 1, 2013 11:07 PM

    ASF Group (ASX: AFA) has signed a subscription agreement to raise $3 million for additional working capital to its existing businesses and investments.

    Notably, the funds will be raised through a placement of 13,636,364 shares to a professional investor at an issue price of $0.22 per share, or a 21.7% premium to the 5-day VWAP of ASF's shares.

    The shares issued under the Placement are subject to a voluntary escrow agreement with ASF restricting their transfer for a period of 12 months.

    Separately, the company has also agreed with Star Diamond Developments to extend the maturity on the $10 million Convertible Loan Facility provided by Star to 30 September 2014.

    At this stage $9 million of the total facility has been drawn down.

    Australian investments

    In the year to 30 June 2013, ASF was primarily in an investing phase compared with the previous year when significant gains were realised on certain investments.

    This is in line with its strategy to identify and develop key early stage projects through joint ventures and strategic investments with the goal of maximising shareholder value.

    It added that investment in Australia is expected to remain a very attractive option for Chinese investment for the foreseeable future.

    Recent investments include the acquisition of a 42.75% stake in copper and gold explorer ActivEX (ASX:AIV) through an on-market takeover bid that closed on 28 June 2013.

    ActivEX is an ASX listed mineral exploration company holding a number of prospective tenements, principally targeting copper-gold and gold mineralisation in Queensland.

    ActivEX also holds a potash project in Western Australia which has an established resource and a granted mining lease.

    ASF also holds a 20.5% stake in Rey Resources (ASX: REY), which holds a large tenement holding in the Canning Basin, Western Australia.

    This includes the Duchess-Paradise coal project that Rey is selling for $21 million on a staged basis.

    Rey has also entered into an agreement with Buru Energy (ASX: BRU) to acquire an additional 15% stake in petroleum Exploration Permits EP457 and EP458 in the Canning Superbasin, bringing its interest up to 25%, 10% being free carried.

    ASF also owns about 20% of ASF Kali Resource, which holds two tenements in the Canning Basin that have low level potential for the discovery of coal and other minerals, as well as 25% in China Coal Resources - an explorer with Exploration Permits and one Application for coal in Queensland, two exploration licences in Tasmania and one tenement in Western Australia.

    ASF holds a 100% stake in ASF Resources, which in turn holds two tenements which are considered to be prospective for coal in the Canning Basin.

    Property

    ASF Properties Pty Ltd is 100% owned by the company and continues to provide property and marketing services to investors in China.

    The company had entered into a strategic partnering agreement with China Real Estate Association earlier this year.

    Under the partnership, ASF will become the sole strategic partner of CREA in Australia and will assist the non-profit in arranging for Chinese entities to invest in Australian real estate developments.

    In return, CREA will promote ASF's projects on its website and in events organised or sponsored by CREA. It will also arrange for potential investors to visit ASF and to explore the possibility of investing in its Australian projects.

    Significant Investor Visa

    The company has also been granted a modified Australian Financial Service Licence to enable it to cater to Chinese entrepreneurs and high net worth individuals under the Significant Investor Visa programme announced by the Australian Government.

    The program lets foreigners settle in Australia for up to four years, then seek permanent residency.

    The visa program was launched in November 2012 and is understood to have attracted over 150 applicants to date in exchange for a minimum A$5 million investment during their stay.

    The money can be placed in federal or state bonds, managed funds, Australian companies, or in a combination of those assets.

    Analysis

    ASF Group is unique among ASX-listed public companies in Australia as a creator and facilitator of two-way cross-border investments, trade and technology transfers between China and Australia.

    The company's investments have been made with a medium to long-term perspective with a view to assisting significant value creation in the investee companies, increasing shareholder value. Investmetnts may be realised from time to time when it is appropriate and beneficial to do so.

    The additional funds will allow it to continue with this strategy.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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