• Flinders’ plan to delist angers small holders
Flinders’ plan to delist angers small holders
14 Dec, 2018, 1 Comment

Summary: Plans by former iron ore high-flyer Flinders Mines to delist from the ASX have met with a storm of outrage from the company’s minority shareholders.....

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Shares in Flinders halved yesterday after the plan was revealed, with the sharp drop reflecting fears that investors will be left stranded by the move.


The share register of Flinders, which owns the large but lower-grade Pilbara iron ore project in Western Australia, is dominated by New Zealand’s wealthy Todd family, which holds a 55.6 per cent stake in the company.


Todd Corp is supporting the plan, and has offered Flinders a loan to carry out a buyback of up to 10 per cent of the company’s share register ahead of the delisting. Flinders is another relic of the last big iron ore boom, when soaring iron ore prices gave the company a market capitalisation of almost $1 billion. While the company’s value has fallen dramatically since, it still has more than 4000 shareholders on its register, including more than 1000 with holdings worth less than $500.


Many of those smaller small shareholders took to online chatrooms yesterday to voice their displeasure at the news, vowing to fight the delisting plan.


Flinders’ flagship Pilbara project has suffered from a lack of infrastructure solutions, and its best hope of finding a path to seaborne markets has laid in the plans from Todd Corp’s BBI Group to develop a new Pilbara rail and port network. Todd Corp built its stake in Flinders through a takeover bid back in 2016. Since then, Flinders has suffered from poor liquidity and has relied on Todd for continued funding.



Flinders shareholders will meet next month to vote on the delisting plan, and the ASX has already given in-principle approval for Todd to vote on the plan.


Flinders chairman Neil Warburton told The Australian that the board had looked at a range of options for the Pilbara project.


“The view of the board is it’s better in a private vehicle where we can access private equity, and we can access Asian and Middle East investors and large funds that actually invest in these types of projects,” Mr Warburton said.


“Under the current corporate structure it just doesn’t work, especially where one major shareholder has been the significant supporter.”


The ASX late yesterday pushed Flinders into a trading halt.


 

Paul Garvey, 13/12/2018, www.theaustralian.com.au/business/mining-energy/flinders-plan-to-delist-angers-small-holders/news-story/260281acb3150fcf531e61d2bc0c6c3a

Comments.
  • MyPassion

    R Narayan
    07 Jan, 2019

    Since the delisting announcement share price has dropped from around 7 cents to less than 3 cents. The majority owner wants to takeover in cheap by announcing delisting so price will drop. Then they will get shares for much lower price. It will be fine if they pay the price of shares before announcement. What is the rule regarding this delisting? Small shareholders will face huge losses. Any rules to protect shareholders in this type of situation?

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