Paladin placement raises stir
Canadian investors are up in arms following Paladin Energy’s placement programme in which a Singaporean entity Hubo Clean Energy pte has taken up a meaningful stake. Quoting the Financial Post John McNeil, a Canadian investor in Paladin said, “I think the whole principle here is outrageous.” The exclusion of interested investors in Australia and Canada was brought about by the regulations in place in the two countries Paladin claimed. Said Paladin, “While Paladin values its listing on the Toronto Stock Exchange and the support of all its shareholders in Canada, in undertaking a transaction of this sort Paladin is required to comply with legal requirements in multiple jurisdictions, not all of which are compatible with each other.” Paladin further stated that time was a crucial factor in securing an investor with the financial means to commit. “The advantage to a company in circumstances such as Paladin´s in being able to quickly complete an offering of this sort is significant.
It will take approximately two weeks from launch for the issuer to be funded using the Australian offering process. In Canada, a prospectus would first have to be prepared and cleared and then a 21 day offering process undertaken. Under the Canadian approach, it would therefore be a minimum of 5 weeks before the funds are committed, during which time Paladin would be fully exposed to market movements.” Benefiting on cost savings, Paladin preferred to side with Hubo and snub the Toronto Stock Exchange. Paladin said, “This is a significant cost saving to Paladin as well as being a quicker process. Given that the Australian timetable allows this issue to be finalised quickly and with a minimum of expense.” Following the successful completion of the placement, Paladin has managed to raise A$50 million. The placement is the first part of a capital raising strategy and whether Canadian and Australian investors will take part in a subsequent fund-raising programme remains to be seen.