MEDIA RELEASE
Packer & Co comment on ERA rights issue
An $880m right issue, at a near 90% discount, for a company whose main asset is in limbo, is a world first and is likely to become a marquee case study in corporate governance.
This is the third time in four years that UK based Rio Tinto have pushed ERA into heavily discounted capital raisings in an attempt to seize control of ERA through compulsory acquisition. They are doing this once again. This time, two months before a court case that will decide whether ERA retains one of the world’s most valuable deposits of uranium, vital to the world’s decarbonization plans.
This issue is being conducted despite ERA having enough cash on hand to see out this court case, the outcome of which will enable the 9,000 shareholders to decide whether to support the company into the future, knowing whether ERA has any assets, or only liabilities, the extent of which are ever changing.
The price and terms of the issue are determined by Rio, that is clear from ERA's announcement. Rio has controlled ERA for 25 years and it’s sad that they are crucifying ERA's minority shareholders in this two-month window after decades of support.
Contact: Willy Packer +61 438 385 474