JOHANNESBURG (Business Day) -- Rapidly expanding uranium company sxr Uranium One [TSX:SXR] had completed the acquisition of uranium miner UrAsia Energy [TSX-V:UUU], which has mines and exploration properties in Kazakhstan, the companies said yesterday.
The merged company would be called Uranium One, and would apply for a secondary listing on the London Stock Exchange to provide liquidity for its European shareholders.
Its primary listing is on the Toronto Stock Exchange and it has a secondary listing on the JSE.
The final step to the merger was government and regulatory approvals, which were received on Friday. At an UrAsia shareholders' meeting earlier this month, 99.89% of votes were cast in favour of the merger.
sxr Uranium One shareholders were not required to vote on the deal.
Under the arrangement with sxr Uranium One, UrAsia Energy shareholders received 0.45 sxr Uranium One shares for each UrAsia share held, resulting in UrAsia shareholders holding 60% of the merged entity and sxr Uranium One shareholders holding 40%.
Jean Nortier, sxr Uranium One's chief financial officer, who will become Uranium One's executive vice-president of corporate affairs, said there were some queries from SXR Uranium shareholders about why they were not given the opportunity to vote on the deal.
It was explained to them that the shares of both companies were widely held so there was no single controlling shareholder and that it would have created additional complexity in closing a deal where speed was of the essence. Also, because sxr Uranium's primary listing was in Canada, the JSE rules defaulted to those of the Toronto Stock Exchange, which did not require an sxr Uranium shareholders' vote in this case.
The deal was subject to a Canadian court-approved scheme of arrangement.
The board of directors of sxr Uranium has been reconstituted, with UrAsia's nonexecutive chairman, Ian Telfer, becoming chairman of the new entity. Changes have also been made to senior executive management.
UrAsia produces about 1.8-million pounds of uranium a year and plans to accelerate the development of two other uranium mines in Kazakhstan.
Uranium One's president and CEO Neal Froneman said the merger had created a globally diversified, low-cost uranium producer. The company would continue to develop and grow its existing assets and seek additional acquisition opportunities.
Uranium One's shares were trading at R108 on the JSE by midday yesterday, more than double the R50 of a year ago.
The weekly spot price of uranium has risen to $113/lb from $55/lb six months ago.