Exemption Orders (Discretionary)
OXUS RESOURCES CORPORATION
2001 BCSECCOM 484
Headnote:
Mutual Reliance Review System for Exemptions Relief Applications - Issuer exempted from issuer bid provisions and registration and prospectus requirements in connection with reorganization to become a UK company and obtain AIM Listing - First trades in securities acquired pursuant to issuer bid deemed a distribution unless executed through facilities of the Alternative Investment Market of the London Stock Exchange
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 34(1)(a), 45(2)(24), 45(2)(28), 48, 61, 74(2)(21), 74(2)(26), 76, 99(h), 105 to 108, 110 AND 114(2)(c)
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA AND ONTARIO
AND
IN THE MATTER OFTHE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF OXUS RESOURCES CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of British Columbia, Alberta and Ontario (the "Jurisdictions") has received an application from Oxus Resources Corporation ("Oxus") for a decision under the securities legislation of the Jurisdictions (the "Legislation") that:
(i) the requirements contained in the Legislation relating to delivery of an offer and issuer bid circular and any notices of change or variation thereto, minimum deposit periods and withdrawal rights, take-up and payment for securities tendered to an issuer bid, disclosure, restrictions upon purchases of securities, financing, identical consideration and collateral benefits (the "Issuer Bid Requirements") not apply to an offer (the "Offer") to acquire all the outstanding ordinary shares and warrants of Oxus,
(ii) the registration and prospectus requirements contained in the Legislation not apply in respect of certain trades in securities of Oxus Mining plc ("Oxus UK"), a wholly-owned subsidiary of Oxus, in connection with a reorganization transaction involving Oxus (the "Reorganization") pursuant to which, among other things, Oxus UK will make the Offer, and
(iii) the prospectus requirements contained in the Legislation not apply in respect of the first trades in securities of Oxus UK acquired by residents of the Jurisdictions in connection with the Offer over the Alternative Investment Market of the London Stock Exchange (the "AIM");
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the principal regulator for this Application;
AND WHEREAS Oxus has represented to the Decision Makers that:
1. Oxus is a corporation existing under the laws of the British Virgin Islands with its registered and principal office located in the British Virgin Islands.
2. The authorized capital of Oxus consists of 100,000,000 ordinary shares ("Ordinary Shares"), of which there are currently 51,807,805 Ordinary Shares outstanding. In addition, there are currently outstanding warrants ("Warrants") to acquire an aggregate of 15,511,151 Ordinary Shares and options to acquire an aggregate of 5,700,000 Ordinary Shares.
3. Oxus is not a reporting issuer under the Legislation of any of the Jurisdictions. None of the outstanding securities of Oxus are listed or quoted on any stock exchange or quotation system in Canada or elsewhere.
4. There are 235 registered holders of Ordinary Shares. Twelve registered holders of Ordinary Shares holding an aggregate of 1,855,975 Ordinary Shares (representing approximately 3.58 per cent of the outstanding Ordinary Shares) are resident in the Jurisdictions, of which approximately ten registered holders (holding approximately 3.29% of the outstanding Ordinary Shares) are resident in Ontario, one registered holder (holding approximately 0.21% of the outstanding Ordinary Shares) is resident in British Columbia, and one registered holder (holding approximately 0.08% of the outstanding Ordinary Shares) is resident in Alberta. In addition, two holders of record with addresses located in Ontario hold Warrants to acquire an aggregate of 694,445 Ordinary Shares.
5. Oxus UK is a corporation existing under the laws of the United Kingdom with its registered and principal office located in England. Oxus UK was incorporated for the sole purpose of completing the Reorganization and carries on no other business.
6. The authorized capital of Oxus UK consists of 10,000 ordinary shares ("New Ordinary Shares"), of which there are currently 1,000 New Ordinary Shares outstanding. All of the outstanding New Ordinary Shares are currently owned by Oxus. In connection with the Reorganization, it is anticipated that the authorized capital of Oxus UK will be increased to 200,000,000 New Ordinary Shares.
7. Oxus UK is not a reporting issuer under the Legislation of any of the Jurisdictions. None of the outstanding securities of Oxus UK are listed or quoted on any stock exchange or quotation system in Canada or elsewhere. However, as described in paragraph 8 below, it is proposed that the New Ordinary Shares be quoted on the AIM following the completion of the Reorganization.
8. Oxus is proposing to complete an equity and debt financing in the United Kingdom (the "UK Financing") and to concurrently become a "public" company with securities quoted on the AIM. In connection with the UK Financing and the quotation of securities on the AIM, it is considered desirable that Oxus effect the Reorganization.
9. The principal purpose of the Reorganization is to allow security holders of Oxus to become security holders of a corporation having its corporate domicile located in the United Kingdom rather than in the British Virgin Islands. The Reorganization will result in the security holders of Oxus becoming security holders of Oxus UK and Oxus becoming a wholly-owned subsidiary of Oxus UK. Upon the completion of the Reorganization, it is intended that the UK Financing will be completed by Oxus UK and the New Ordinary Shares will become quoted on the AIM.
10. At an extraordinary general meeting of the shareholders held on December 20, 2000 at which shareholders of Oxus representing 81% of the outstanding Ordinary Shares were present, an amendment to the articles of association of Oxus to provide for a right of redemption in respect of Ordinary Shares was unanimously approved. Such right of redemption will allow the Ordinary Shares outstanding upon the completion of the Offer to be redeemed by Oxus, without the consent of the holder thereof, for the fair market value thereof, provided that not less than 99.9 per cent of the Ordinary Shares, or such lesser percentage of the Ordinary Shares as the directors may resolve, have been exchanged or agreed to be exchanged for New Ordinary Shares under the Offer. For the purposes of the foregoing, the “fair market value” of the Ordinary Shares will be not less than the price at which New Ordinary Shares are offered to the public pursuant to the UK Financing.
11. As part of the Reorganization, Oxus UK will make the Offer to acquire all of the outstanding Ordinary Shares and Warrants of Oxus in exchange for (i) in respect of Ordinary Shares, that number of New Ordinary Shares as are required to be issued to each holder of Ordinary Shares such that the holder's current percentage interest in Oxus will be maintained in Oxus UK, prior to taking into account the UK Financing, and (ii) in respect of the Warrants, warrants ("New Warrants") to purchase, on substantially the same terms as those in respect of the Warrants, that number of New Ordinary Shares as would have been issued to each holder of Warrants pursuant to the Offer if the Ordinary Shares issuable upon the exercise of Warrants were outstanding at the time of, and were acquired by Oxus UK pursuant to, the Offer.
12. The Offer is conditional upon, among other things, Oxus UK entering into a placing agreement with the underwriters for the UK Financing and the determination by the directors of Oxus UK, in consultation with such underwriters, that admission of the New Ordinary Shares on the AIM will occur. It is the intention of the parties to complete the Offer sufficiently close in time to the completion of the UK Financing such that the former will not proceed in the absence of the latter.
13. The New Ordinary Shares will provide holders of Ordinary Shares with a security of a U.K. company that is the economic equivalent of the Ordinary Shares. The rights attaching to the New Ordinary Shares will be the equivalent of, or superior to, the rights attaching to the Ordinary Shares. Immediately following the Reorganization, and prior to taking into account the UK Financing, neither the nature and extent of the equity participation of the holders of New Ordinary Shares in Oxus UK nor the value of their equity participation will be less than the value of their interest in Oxus prior to the Reorganization.
14. In connection with the Offer, an offer document and a form of acceptance (collectively, the “Offer Document”) containing full, true and plain disclosure about the securities of Oxus UK will be mailed to Oxus security holders. All material relating to the Offer and any amendment thereto, including the Offer Document, that is sent generally to other holders of Ordinary Shares or Warrants by or on behalf of Oxus or Oxus UK will concurrently be sent to all Oxus securityholders resident in the Jurisdiction and filed with each of the Decision Makers.
15. The Offer will be made in compliance with the applicable securities laws of the British Virgin Islands. Oxus cannot rely upon the exemptions from the Issuer Bid Requirements contained in the Legislation because the British Virgin Islands is not recognized for the purposes of the Legislation by the Decision Makers.
AND WHEREAS pursuant to the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides that Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers under the Legislation is that:
1. the Issuer Bid Requirements shall not apply in respect of the Offer, provided, however, that all material related to the Issuer Bid and any amendment thereto that is sent generally to other holders of Ordinary Shares or Warrants by or on behalf of Oxus are concurrently sent to security holders whose last address, as shown on the books of Oxus, is in the Jurisdictions and such material is filed with each of the Decision Makers in the Jurisdictions; and
2. the registration and prospectus requirements contained in the Legislation shall not apply in respect of trades by Oxus UK in New Ordinary Shares and New Warrants to existing security holders of Oxus pursuant to the Offer, provided, however, that (a) the first trade in New Ordinary Shares and New Warrants acquired pursuant to the Reorganization and (b) the first trade in New Ordinary Shares acquired upon the exercise of the New Warrants shall be a distribution unless such first trades are executed through the facilities of the AIM in accordance with the rules of such market.
DATED this 4th day of April, 2001.
J.A. Geller K.D. Adams