The Takeovers Panel will examine a capital raise by ERA, after earlier saying it wouldn’t

Former uranium miner Energy Resources of Australia will pause a contentious $880m capital raise after the Takeover’s Panel decided it would review its own decision not to intervene.

The Ranger uranium mine, owned by Energy Resources of Australia.

Former uranium miner Energy Resources of Australia will pause a contentious $880m capital raise after the Takeover’s Panel decided it would review its own decision not to intervene in the process on behalf of minority shareholders.

The decision, which comes two weeks after the panel originally declined to conduct proceedings, is a win for ­minority shareholders Zentree Investments and Packer & Co, which want any decision about the capital raise pushed out to beyond October 28 at the least.

This is the date when ERA will argue in court that a decision by the Northern Territory Government earlier this year, not to renew its Jabiluka mineral release, should be overturned.

Should this eventuate, Packer & Co’s Willy Packer has previously told The Australian, the fortunes of the company could change considerably, given fellow uranium company Boss Energy had offered ERA $550m for Jabiluka in a non-binding deal floated earlier this year.

That deal fell through once the decision to deny ERA a 10 year mineral lease extension, made by the former Labor government, was made public in July.

Mr Packer said that given there had been a change of government in the NT, with the Country Liberal Party taking power in August, there was scope for the July decision to be rescinded, and a deal to develop Jabiluka could potentially be resuscitated.

In early September, Zentree and Packer instigated proceedings with the Takeovers Panel, arguing that ERA’s majority shareholder Rio Tinto was “taking advantage” of the litigation around the Jabiluka mineral lease to assume control of the company, and that ERA did not need to raise capital immediately.

Outside of Jabiluka, ERA’s only asset is the Ranger uranium project, also in the Northern Territory, which has a large ongoing rehabilitation libaility.

ERA said in September it needed to raise $210m from existing and third party investors to fund rehab works, which are expected to cost $2.4bn in the next few years.

Rio countered by saying the ‘only terms” under which it would tip in capital were for an $880m capital raise at a discounted 0.2c per share.

Rio would take up $760m of the offer, which, if ­Zentree and Packer & Co did not take up their allocations, would push it past the 90 per cent ownership threshold, allowing Rio to compulsorily acquire the shares it did not own.

The Takeovers Panel told ERA on September 25 it had declined to conduct proceedings, saying ERA’s independent board committee took apppropriate steps in progressing the capital raise and it was “not minded to second guess the committee’s decisions’’.

ERA told the ASX on Monday that following an application for a review of this decision, the Takeovers Panel would examine the capital raise.

“Following the president of the Takeovers Panel’s consent to the review application, the review panel has decided to conduct proceedings,’’ ERA said.

“Noting the uncertainty created by the review application, the independent board committee will advise of a revised entitlement offer timetable after the outcome of the review application is known.’’

The capital raise was originally expected to close on September 26, with the new shares to start trading on the ASX on Monday, however the date of the offer has been delayed a number of times following the matter being referred to the Takeovers Panel.

ERA shares were trading 10 per cent high at 1.1c on Monday.

Originally published as The Takeovers Panel will examine a capital raise by ERA, after earlier saying it wouldn’t