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ASF Group To Raise $10M For Portfolio Investments

ASF Group (ASX:AFA) is raising $10 million through a fully underwritten one for eight rights issue to fund investments in its current portfolio and investigate business opportunities.

The company is offering up to 55,870,162 shares priced at $0.18 each, or a 5.26% discount to its closing price of $0.19 on 1 July 2014, under the offer.

It is fully underwritten by its three largest shareholders, FY Holdings Limited, Ruby Bridge Group Limited and Suntimes International Ltd.

Each of the Underwriters has agreed to subscribe for their full entitlement and to underwrite 33.3% of the shortfall.

Offer Details

The fully underwritten pro-rata non-renounceable one for eight rights issue of 55,870,162 shares will raise a total of $10,056,629 if every shareholder exercised its rights.

This is priced at $0.18 per share, or a 5.6% discount to the closing price of the company's shares on the ASX on 1 July 2014 of $0.19.

Purpose of Offer

Proceeds from the offer will be used to:

- Fund investments in current portfolio assets, including engaging property development consultants;
- Investigate and advance business development opportunities for the Company, with the goal of creating further value for shareholders; and
- Provide working capital to the Company generally.


ASF's Broadwater Marine Project on the Gold Coast was recently selected by Queensland Deputy Premier and Minister for State Development, Infrastructure and Planning Jeff Seeney as one of two regional projects that can proceed to the next stage of development.

Notably, this allows its ASF Consortium Pty Ltd to receive a gaming licence if the project proceeds and meets all the necessary environmental, planning and gaming licencing approvals.

Broadwater, a multi-billion integrated resort, cruise ship terminal, marina, retail entertainment, hospitality, community open space, recreation facilities and residential development, could create 1300 construction jobs and more than 10,000 ongoing operational jobs.

It is also expected to boost tourist visitation to what is already Australia's leading holiday destination.

The company had also sold 60 million shares in ActivEX Limited (ASX:AIV) for $0.0175 per share, or a 52% premium on the net book value of its costs of investment.

It retains a 16.1% interest in the explorer, which holds a portfolio of exploration projects focused on copper and gold across Queensland and one advanced potash project in Western Australia.

ASF's associate Civil & Mining Resources (CMR) had in April started a metallurgical coal exploration program at the strategically located Cracow Project in the eastern Bowen Basin, Queensland.

Cracow is located close to Anglo American's Dawson Mine that produces more than 9 million tonnes per annum of coking, soft coking and thermal coal, using open cut and highwall mining methods.

It is located 20 kilometres southeast of the Moura Rail System that currently services the Dawson Mine Complex and transports coal 184 kilometres to the coal terminals in the Gladstone Region.

ASF has a 68.205% stake in CMR through its 53.69%-owned subsidiary ASF Resources.

The company also holds a 20.5% interest in Rey Resources (ASX:REY) and a 19.9% stake in Key Petroleum (ASX:KEY), who are planning to drill the Dunnart-2 oil exploration well in Western Australia's North Perth Basin.

It also holds 2.2 million shares in Omnitech Holdings (ASX: OHL), an investment holding company that is listed (but not trading) on the ASX.

ASF has base metal tenements in Tasmania following its acquisition of Austin Resources Pty Ltd and ASF Copper Pty Ltd from Profit Achieve Holdings Limited in March 2014 as well as 27 Exploration Permits in Queensland.


ASF Group's rights issue is fully underwritten ensuring a $10 million in funding boost. That it is underwritten by the three largest shareholders is a strong sign of their perception of potential upside in share price and market valuation.

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