Mr. David Cataford reports
CHAMPION IRON ANNOUNCES INTENTION TO RE-DOMICILE TO CANADA
Champion Iron Ltd. is proposing to redomicile from Australia to Canada by way of a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth).
Reasons for the redomiciliation
After considering the potential benefits and disadvantages of the redomiciliation, the board of directors has determined that a redomicile to Canada best serves the company's interest, highlighting:
- The redomiciliation will align the domicile or location of the new listed parent company (Champion Canada), with its assets, operations and predominant shareholder base;
- The redomicile will increase the attractiveness of Champion Canada to more diverse financial markets;
- The redomicile will increase the attractiveness of Champion Canada to Canadian institutional investors who may require a Canadian corporate domicile (including a place of incorporation in Canada) for their investments;
- Champion Canada may become eligible for inclusion in Canadian indices, such as the S&P/TSX Composite Index, which require a domestic corporate domicile (including a place of incorporation in Canada), without impacting Australian indices that do not prescribe an Australian corporate domicile as a condition for inclusion;
- The potential cost savings to be realized by the simplification of the corporate structure of Champion Canada;
- The active listing on the Toronto Stock Exchange and Australian Securities Exchange will be retained;
- The redomicile will not result in any changes to operations, management or strategy.
Commenting on the announcement, Champion Iron's chief executive officer, David Cataford, said: "Although our company has evolved into a successful mining operator headquartered in Canada, we maintain significant roots in Australia, where many of our early investors reside. While today's announcement aligns our company's domicile with its operations, we look to build our already strong shareholder base in Australia with our active listings on the TSX and ASX, which will remain unaffected by this announcement."
Board unanimously recommends the redomiciliation
The company's board unanimously recommends that shareholders of Champion Australia approve the redomicile by voting in favour of the resolution to approve the scheme at the meeting of the company's shareholders to be scheduled to consider this resolution in March, 2020. Each member of the board intends to vote the Champion Australia shares (as defined below) that he or she holds (or that are held on his or her behalf) in favour of the scheme resolution.
Independent expert's report
Champion Australia has appointed Grant Thornton Corporate Finance Pty. Ltd. as the independent expert to determine whether or not the scheme to give effect to the redomicile is in the best interests of Champion Australia shareholders. The scheme booklet in connection with the redomicile will include the report from the independent expert.
Overview of the key features of the redomicile
Champion Australia has today entered into a scheme implementation deed with Champion Canada, a new holding company incorporated under the laws of the Province of Quebec, Canada. The scheme implementation deed records the terms on which Champion Australia and Champion Canada have agreed to pursue the redomicile.
If the scheme is implemented:
Champion Canada will acquire all the ordinary shares in Champion Australia and Champion Australia shareholders (who are classified as eligible scheme participants) will receive one Champion Canada common share listed on the TSX or one chess depository interest (CDI) of Champion Canada quoted and traded on the ASX as the scheme consideration for each Champion Australia share that they hold on the record date of the scheme.
- Champion Australia will become a subsidiary of Champion Canada.
- Champion Australia will be delisted from the ASX and the TSX.
Champion Canada common shares will be listed on the TSX.
Champion Canada will be listed on the ASX with CDIs quoted and traded on the ASX.
As such, Champion Canada will effectively replace Champion Australia as the listed entity on the ASX and the TSX.
The implementation of the scheme is conditional upon the satisfaction of certain conditions, including:
- The independent expert concluding that the scheme to give effect to the redomicile is in the best interests of Champion Australia shareholders;
- Champion Australia shareholders approving the scheme;
- The Federal Court of Australia approving the scheme;
- Champion Canada obtaining approval from the Foreign Investment Review Board.
Maintain ASX and TSX listing
Champion Canada is governed by the laws of the Province of Quebec, Canada, and will continue to be subject to the rules and policies of the ASX and the TSX. The regulatory environment in Canada is considered comparable with that in Australia. As such, securityholders in Champion Canada will have similar regulatory protection to that currently available under the Australian Corporations Act 2001 (Cth) to Champion Australia shareholders.
It is expected that the scheme booklet will be sent to Champion Australia shareholders in February, 2020, followed by a shareholders meeting to be scheduled in March, 2020. Assuming satisfaction or waiver of all the conditions precedent, the scheme will be implemented in early April, 2020.
The scheme booklet will outline full details of the scheme and the redomicile, and will include details of the scheme, the reasons for the board's recommendation and the report from the independent expert. Champion Australia shareholders are encouraged to carefully review the scheme booklet in full once received.
Full details of the impact of the scheme, including the change to regulation, will be made in the scheme booklet.
Further information on the redomicile will be lodged with the ASX, disseminated and filed in Canada, as required, and included on the company's website.
About Champion Iron Ltd.
On April 11, 2016, the company, through its subsidiary, Quebec Iron Ore Inc., acquired the Bloom Lake assets from bankruptcy protection. Following the release of a feasibility study on Feb. 16, 2017, the company recommissioned Bloom Lake in February, 2018, which completed its first shipment on April 1, 2018. In June, 2019, the company released a feasibility study for the phase II expansion, which envisions doubling the mine's overall capacity from 7.4 million tonnes per year to 15 million tonnes per year. On Aug. 16, 2019, the company finalized the terms of an agreement with Ressources Quebec Inc., whereby the company acquired Ressources Quebec's 36.8-per-cent equity interest in Quebec Iron Ore and now owns 100 per cent of Quebec Iron Ore, which owns the Bloom Lake mine.
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