27 July 2012
Royal Boskalis Westminster N.V. (Boskalis) will take a 20 percent
shareholding in Chatham Rock Phosphate and assume a seat on the board,
in a world-first for the undersea mining industry.
It is the first time a major dredging company has taken a substantial equity position in an undersea mining project.
Boskalis has today been issued shares at an issue price of $0.22 to
give it a 15% shareholding in CRP. Subject to shareholder approval,
which is intended to be sought in early September, Boskalis will be
issued additional shares to move to a 19.99% shareholding. The Board of
CRP expects to appoint a nominee of Boskalis as a director of CRP in a
few weeks time.
CRP holds a prospecting permit to develop an undersea rock phosphate
resource, 400m below the surface, on the Chatham Rise east of New
Zealand.
Peter Berdowski, CEO Boskalis, said CRP offers a unique opportunity
for Boskalis to get involved in the fledgling deep-sea mining industry.
“This is a very interesting growth opportunity allowing us to draw on
our wealth of expertise and to contribute this to the successful
development of this unique project, together with our partner Chatham."
CRP Managing Director Chris Castle said he was honoured Boskalis, the
industry’s global leader, had chosen to support this innovative New
Zealand project.
“Boskalis is a great partner and works very collegially with CRP,
despite the difference in size and scope of the companies. It has
amassed centuries of knowledge of the marine industry and can call on
the best resources globally.”
The agreement allows for Boskalis to subscribe for up to 20 percent
of CRP’s issued capital, and to appoint a nominee to the CRP board. The
key terms of the agreement are summarised below.
It follows meetings at the Boskalis headquarters in Papendrecht, the
Netherlands, in late June to review the past year of activities since
Boskalis was appointed as the project’s technical partner to design a
process to extract phosphate nodules from the seabed.
The next stage of the project for the remainder of 2012 will involve
Boskalis refining its system for recovering and separating the phosphate
nodules, applying adapted and proven technologies. The key
considerations include capital and operating costs and minimising
possible environmental effects.
CRP holds an offshore prospecting permit covering an area of 4726 km2
on the central Chatham Rise. The permit area, in New Zealand
territorial waters, is located 450 km east of Christchurch and includes
significant shallow seabed deposits of rock phosphate. The initial term
of the permit is two years with rights to either extend the prospecting
permit or apply for a mining licence.
Establishment of a rock phosphate industry in New Zealand territorial
waters has a significant number of economic, environmental and market
benefits.
Royal Boskalis Westminster N.V. is a leading global services provider
operating in the dredging, maritime infrastructure and maritime
services sectors. Boskalis provides creative and innovative solutions to
infrastructural challenges in the maritime, coastal and delta regions
of the world including the construction and maintenance of ports and
waterways, land reclamation, coastal defense and riverbank protection.
It offers a wide variety of marine services through SMIT and has other
strategic partnerships in the Middle East (Archirodon) and in offshore
services (Lamnalco).
The company holds important home market positions in and outside of
Europe. Boskalis has a versatile fleet of over 1,100 units and operates
in over 75 countries across six continents. Including its share in
partnerships, Boskalis has approximately 14,000 employees.
Key terms of Arrangement
CRP and Boskalis have today entered two agreements – a contract for services and an investment agreement.
The contract for services provides for Boskalis to undertake a range of services to CRP in three phases:
- The first phase of services has already been provided and consisted
of initial design work on a rock phosphate extraction and recovery
system and providing support to CRP on the survey cruises undertaken
earlier this year with Odyssey Marin Exploration. The cost of these
services to CRP is €500,000.
- The next phase of work will occur over the next six months and will
include the provision of geotechnical reports, the conceptual design of
recovery and separation systems, environmental impact assessments and
transportation options for rock phosphate recovery. The cost of these
services to CRP will be approximately €630,000.
- The final phase will occur in the first half of next year and will
consist of the final detailed design of the rock phosphate recovery and
separation system. The cost of this phase is estimated to be €4 million
with the parties splitting those costs equally.
The contract for services then provides that payment for the above
work will be met under the terms of an investment agreement between the
parties. The investment agreement provides that:
- 14,759,628 fully paid ordinary shares in CRP (representing a 15%
shareholding) are issued to Boskalis at an issue price of $0.22 per
share.
- The costs incurred for the phase one work detailed above are applied against the issue price due for the shares.
- Subject to shareholder approval, further shares are to be issued to Boskalis so that it has a 19.99% shareholding in CRP.
- Boskalis may provide the balance of the issue price for the shares
to CRP either in cash or in satisfaction of the costs payable by CRP for
the services provided under the second and third phases of the contract
for services.
- If the issue price is not paid in full within 12 months, then all
shares that have not been paid for will be transferred back to CRP for
cancellation.
Subsea Partial Conversion
In addition to the share issue to Boskalis, CRP has also today issued
3,962,376 ordinary shares to Subsea Investments II, LLC (Subsea) at an
issue price of $0.20 per share.
This allotment arises from a partial conversion of the convertible
loan advanced by Subsea as approved by shareholders in April this year.
This partial conversion reduces the amount owed by CRP under the loan by
approximately $800,000 to approximately $2.55 million. Subsea’s
percentage shareholding in CRP is maintained at 19.99% as a result of
this allotment.
As previously advised to shareholders, it is intended to seek
shareholder approval under the Takeovers Code to permit full conversion
of the loan and for Subsea to increase its shareholding percentage above
20%. This approval is intended to be sought at the same time as the
approval for the further issue of shares to Boskalis.
Chris Castle - Managing Director CRP
+64 21 55 81 85 or chris@widespread.co.nz
Martijn Schuttevaer – Director Investor Relations & Corporate Communications Boskalis
Martijn.schuttevaer@boskalis.com
Class of security: Ordinary Shares
ISIN: NZWENE0003S0
Number issued: 18,722,004 ordinary shares
Issue price: $0.20 per ordinary share for 3,962,376 shares, $0.22 per ordinary share for 14,759,628 shares
Payment in cash: Yes for 3,962,376 shares
Fully paid: Yes
Percentage of class: 23.50%
Purpose of the issue: Partial conversion of the convertible loan advanced by Subsea and equity investment by Boskalis
Authority for the issue: Board resolutions
Date of issue: 27 July 2012
Total number of securities on issue following allotments: 98,397,522 ordinary shares
+64 21 5581985
chris@crpl.co.nz
PhosphateKing