Both companies have agreed to a merger through a scheme of arrangement under which Deep Yellow will acquire 100% of Vimy shares on offering, the statement said.
Each Vimy shareholder will receive 0.294 fully paid Deep Yellow common shares for each fully paid Vimy common share held. If a merger goes through, Deep Yellow shareholders will own 53% of the combined company and Vimy shareholders the remaining interest, the statement said.
“Deep Yellow’s expanded strong technical team along with Vimy personnel positions us well to bring both projects online when uranium prices support the generation of long-term, sustained positive cash flows,” said John Borshoff, Managing Director and Chief Executive Officer of deep yellow.
The combined company is estimated to have a pro forma market capitalization of approximately A$658 million, cash and cash equivalents of approximately A$106 million and no balance sheet debt.
Vimy’s Board of Directors unanimously recommends that shareholders vote in favor of the Scheme in the absence of a superior proposal.
Paladin Energy, another Australian uranium producer, said in a statement it intends to raise more than A$200 million in capital to help restart its Langer Heinrich uranium mine in Namibia.
($1 = 1.3340 Australian Dollars)
(By Praveen Menon; Edited by Sherry Jacob-Phillips)