Phosphate Resources Limited – Application in Relation to Phosphate Resources Limited [02/01/2003] The Takeovers Panel

02 January 2003

APPLICATION IN RELATION TO PHOSPHATE RESOURCES LIMITED

The Panel advises that it has today received an application from Mr Gerry Pauley and Dr Gordon Elkington (Shareholders) in relation to a buy-back of 25% of the shares, and a proposed one for three rights issue, by Phosphate Resources Limited (PRL) (an unlisted public company).

The application seeks a declaration of unacceptable circumstances and interim and final orders in relation to the buy-back and the rights issue.

The Shareholders are both shareholders in PRL. Asset Backed Holdings Limited (ABK) is the largest shareholder in PRL with a holding of 19.9%. ABK is named as the underwriter for PRL's proposed rights issue.

The Shareholders have submitted that as a result of the buy-back ABK has increased its percentage holding in PRL to 26.7%, and as a result of underwriting the rights issue may increase its holding to a maximum of 39.6%, both without the payment of a takeover premium.

The Shareholders have sought orders preventing ABK from underwriting PRL's share issue without the approval of PRL's other shareholders and an interim order that no shares be issued to participants or the underwriter to this proposed issue until the matters are determined by the Panel.

The Panel notes that it has not yet considered the issues raised and makes no comment on the merits of the application. It also notes that it has not received submissions from the other parties to the application and it is, therefore, unaware of their views.

The President of the Panel will shortly appoint a sitting Panel to consider the application.

Nigel Morris
Director, Takeovers Panel
Level 47 Nauru House
80 Collins Street
Melbourne VIC 3000
Ph: +61 3 9655 3501
nigel.morris@takeovers.gov.au