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Oxus Resources Corporation - MRRS Decision
IN THE MATTER OF
THE SECURITIES LEGISLATION
OF BRITISH COLUMBIA, ALBERTA AND ONTARIO
AND
IN THE MATTER OF
THE 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 BritishColumbia, 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 anynotices of change or variation thereto, minimum deposit periods and withdrawal rights, take-up and paymentfor securities tendered to an issuer bid, disclosure, restrictions upon purchases of securities, financing, identicalconsideration and collateral benefits (the "Issuer Bid Requirements") not apply to an offer (the "Offer") toacquire 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 tradesin securities of Oxus Mining plc ("Oxus UK"), a wholly-owned subsidiary of Oxus, in connection with areorganization transaction involving Oxus (the "Reorganization") pursuant to which, among other things, OxusUK will make the Offer, and
(iii) the prospectus requirements contained in the Legislation not apply in respect of the first trades in securities ofOxus UK acquired by residents of the Jurisdictions in connection with the Offer over the Alternative InvestmentMarket 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 officelocated in the British Virgin Islands.
2. The authorized capital of Oxus consists of 100,000,000 ordinary shares ("Ordinary Shares"), of which there arecurrently 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 of5,700,000 Ordinary Shares.
3. Oxus is not a reporting issuer under the Legislation of any of the Jurisdictions. None of the outstandingsecurities 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 holdingan aggregate of 1,855,975 Ordinary Shares (representing approximately 3.58 per cent of the outstandingOrdinary Shares) are resident in the Jurisdictions, of which approximately ten registered holders (holdingapproximately 3.29% of the outstanding Ordinary Shares) are resident in Ontario, one registered holder (holdingapproximately 0.21% of the outstanding Ordinary Shares) is resident in British Columbia, and one registeredholder (holding approximately 0.08% of the outstanding Ordinary Shares) is resident in Alberta. In addition, twoholders of record with addresses located in Ontario hold Warrants to acquire an aggregate of 694,445 OrdinaryShares.
5. Oxus UK is a corporation existing under the laws of the United Kingdom with its registered and principal officelocated in England. Oxus UK was incorporated for the sole purpose of completing the Reorganization andcarries on no other business.
6. The authorized capital of Oxus UK consists of 10,000 ordinary shares ("New Ordinary Shares"), of which thereare currently 1,000 New Ordinary Shares outstanding. All of the outstanding New Ordinary Shares are currentlyowned by Oxus. In connection with the Reorganization, it is anticipated that the authorized capital of Oxus UKwill 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 outstandingsecurities 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 theAIM following the completion of the Reorganization.
8. Oxus is proposing to complete an equity and debt financing in the United Kingdom (the "UK Financing") andto concurrently become a "public" company with securities quoted on the AIM. In connection with the UKFinancing and the quotation of securities on the AIM, it is considered desirable that Oxus effect theReorganization.
9. The principal purpose of the Reorganization is to allow security holders of Oxus to become security holders ofa corporation having its corporate domicile located in the United Kingdom rather than in the British VirginIslands. The Reorganization will result in the security holders of Oxus becoming security holders of Oxus UKand Oxus becoming a wholly-owned subsidiary of Oxus UK. Upon the completion of the Reorganization, it isintended that the UK Financing will be completed by Oxus UK and the New Ordinary Shares will become quotedon the AIM.
10. At an extraordinary general meeting of the shareholders held on December 20, 2000 at which shareholders ofOxus representing 81% of the outstanding Ordinary Shares were present, an amendment to the articles ofassociation of Oxus to provide for a right of redemption in respect of Ordinary Shares was unanimouslyapproved. Such right of redemption will allow the Ordinary Shares outstanding upon the completion of the Offerto be redeemed by Oxus, without the consent of the holder thereof, for the fair market value thereof, providedthat not less than 99.9 per cent of the Ordinary Shares, or such lesser percentage of the Ordinary Shares asthe directors may resolve, have been exchanged or agreed to be exchanged for New Ordinary Shares underthe Offer. For the purposes of the foregoing, the "fair market value" of the Ordinary Shares will be not less thanthe 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 Sharesand Warrants of Oxus in exchange for (i) in respect of Ordinary Shares, that number of New Ordinary Sharesas are required to be issued to each holder of Ordinary Shares such that the holder's current percentageinterest in Oxus will be maintained in Oxus UK, prior to taking into account the UK Financing, and (ii) in respectof the Warrants, warrants ("New Warrants") to purchase, on substantially the same terms as those in respectof the Warrants, that number of New Ordinary Shares as would have been issued to each holder of Warrantspursuant to the Offer if the Ordinary Shares issuable upon the exercise of Warrants were outstanding at thetime 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 theunderwriters for the UK Financing and the determination by the directors of Oxus UK, in consultation with suchunderwriters, that admission of the New Ordinary Shares on the AIM will occur. It is the intention of the partiesto complete the Offer sufficiently close in time to the completion of the UK Financing such that the former willnot 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 theeconomic equivalent of the Ordinary Shares. The rights attaching to the New Ordinary Shares will be theequivalent of, or superior to, the rights attaching to the Ordinary Shares. Immediately following theReorganization, and prior to taking into account the UK Financing, neither the nature and extent of the equityparticipation of the holders of New Ordinary Shares in Oxus UK nor the value of their equity participation willbe 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 sentgenerally to other holders of Ordinary Shares or Warrants by or on behalf of Oxus or Oxus UK will concurrentlybe 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. Oxuscannot rely upon the exemptions from the Issuer Bid Requirements contained in the Legislation because theBritish 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 eachDecision Maker (collectively the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthat 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 relatedto the Issuer Bid and any amendment thereto that is sent generally to other holders of Ordinary Shares orWarrants by or on behalf of Oxus are concurrently sent to security holders whose last address, as shown onthe books of Oxus, is in the Jurisdictions and such material is filed with each of the Decision Makers in theJurisdictions; and
2. the registration and prospectus requirements contained in the Legislation shall not apply in respect of tradesby Oxus UK in New Ordinary Shares and New Warrants to existing security holders of Oxus pursuant to theOffer, provided, however, that (a) the first trade in New Ordinary Shares and New Warrants acquired pursuantto the Reorganization and (b) the first trade in New Ordinary Shares acquired upon the exercise of the NewWarrants shall be a distribution unless such first trades are executed through the facilities of the AIM inaccordance with the rules of such market.
April 4, 2001.
"J.A. Geller" "K.D. Adams"