Pan Asia plans $2m rights issue

By Romel S. Gurky

ASX-listed Pan Asia Corporation Limited announced Tuesday it has resolved to offer shareholders the ability to participate in a rights issue in the company on the basis of four new shares for every five shares held at A$0.007 per share to raise approximately $2 million.

The company said in a statement that the rights issue is being offered at the same price as the conversion price for the convertible notes under the facility.

The company said it intends to reduce its drawdown of the notes by the amount taken up under the rights issue, therefore reducing the effect of dilution on existing shareholders caused by the facility.

The company said it would have the rights issue documentation prepared and sent to shareholders at its earliest opportunity.

The company also announced that it has entered into a new convertible note financing facility for up to $5 million with Coleman Ventures Limited.

This replaces the agreement executed and announced on March 12, 2015 with Caldecott Ventures Limited, however, the company notes that Coleman is owned and controlled by the same Malaysian based lawyer and businessman, Lee Chin Cheh, who owns and controls Caldecott Ventures Limited.

The key terms of the Facility are as follows:
1. Total amount able to be drawn down under the facility: A$5 million;
2. Drawdown period and limits: $2 million can be drawn down in year 1 and $3 million can be drawn down in year 2.
3. Condition and waiver: The right to drawdown the convertible note is conditional upon the company obtaining shareholder approval for the purposes of item 7 of section 611 of the Corporations Act. However this condition can be waived by Coleman, wholly or partially, such that Noteholder may agree to make the whole or part of the $5 million available to the company without the company having first obtained shareholder approval;
4. Drawdown amounts: 10 notes of $500,000 each;
5. Conversion price of notes in to shares in PZC: $0.007 per share
6. Early conversion: In the event that Coleman elects to convert a note in to shares within 6 months of the note being issued, it will be entitled to receive one option exercisable at $0.01 per share for every two shares received pursuant to the conversion.

?The company is pleased to establish the funding arrangements required to assist with securing the company?s financial position and reinvigorating activity on our flagship high CV thermal coal project in South Kalimantan, Indonesia,? Pan Asia said in a statement.

The company said it has discussions ongoing with other parties who may participate in the TCM Project?s development which, if successful, will be announced on execution of a binding agreement.

Editing by Reiner Simanjuntak