Astron Corporation Limited (ASX: ATR) has called an Extraordinary General Meeting of shareholders to consider the proposed disposal of Astron’s current China-based downstream mineral processing operations.
The Chinese operations contain include the Yingkou rutile and titanium dioxide raw materials separation and processing facility, titanium preparation and micro-agglomeration plant as well as sales and marketing operations.
The company will dispose of the downstream mineral processing operations by means of a demerger into a separate (non-listed) entity Astron Titanium (Yingkou) Hong Kong Holding Limited, a Hong Kong domiciled subsidiary of the Company.
The demerger is proposed to occur by way of a dividend, satisfied by an in-specie distribution of shares in Titanium Hong Kong to existing Astron Corporation Securityholders with one Titanium Hong Kong share to be distributed for every one Astron security held. The distributed shares in Titanium Hong Kong will not be listed on any securities exchange.
As a result of the demerger, Astron will retain its mineral sands assets in Australia and West Senegal and maintain a focus on upstream mineral sands exploration, development and production, while Titanium Hong Kong will continue to operate the downstream mineral processing facility previously operated by the company.
Chairman, Gerald King, said that given Astron’s current focus upon the commercialisation of the large Donald-Jackson mineral sands resource base in Victoria, Australia, the separation of the company’s current portfolio of assets is viewed as a means to provide appropriate organisational focus on the Donald-Jackson Project and streamline the operations of the upstream and downstream businesses.
The company considers it is involved in a potentially transformative event for its portfolio, its ability to progress the Donald Mineral Sands Project to a production stage, and the associated creation of shareholder value,” Mr King said.
“If this project proceeds as planned by the company, it will represent Astron’s first, major upstream mining, concentrating and processing operation, producing mineral sands products of zircon and titania, as well as rare earth elements.
“The progression of the Project has been associated with a strategic review of the company’s business model and portfolio structure. Your directors believe that the most appropriate structure for the Company is to separate the upstream, mineral sands assets from the downstream, China based processing and trading operations, through the demerger of the downstream operations.”
Mr King said Astron expects to continue to benefit from Titanium Hong Kong’s long operating history in Asia, existing connections with the mineral sands market, and its extensive intellectual property in the sector, through arrangements for access to intellectual property and know-how relevant to the commercialisation of the Donald project.