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Southern Cross Gold Consolidated will be ringing the bell on the ASX today at 3PM in Sydney, and while it is listed as a float, it’s a little more complicated than that – today’s IPO is really arriving on a deferred settlement basis.
In the simplest sense, this is a merger between gold explorer Southern Cross Gold (ASX:SXG) and once-upcoming Aussie newcomer Mawson Gold.
Mawson Gold was originally teed up to join the Australian Stock Exchange in January, but before things were fully formalised, Southern Cross and Mawson thrashed out an all-gold team-up plan and merged – hence the ‘Consolidated’ add-on.
Things do get a little tricky from today, at least when it comes to understanding the whole situation – Southern Cross Gold Consolidated securities will start trading today (that 3PM ring-in time I mentioned earlier) but that’s still on a deferred settlement basis. Normal settlement will begin on Tuesday, January 28.
The ‘newly-listed’ company, which will trade under “SX2” from today, will have its new shares settled as CHESS Depositary Interests (CDIs) at a 1:1 ratio.
In Canada, they’re already trading on a post-consolidated basis under “SXGC.” Down Under, Southern Cross Gold’s ASX listing has been halted (and won’t return).
All of this comes after the company twice fronted the Supreme Court of New South Wales for approval. An approval docket was also formally lodged with the Australian Securities and Investments Commission earlier this week.
According to the company, that ASIC lodgement makes the scheme legally effective.
Simply put, Consolidated will now acquire 100% of Southern Cross’ shares that it does not already own and formally unify the two entities together.
Most likely you as the reader are a shareholder and so you’re most interested in what happens to your Southern Cross Gold holdings. That part’s simple; from January 17 at 7PM, you’ll receive either one SX2 CDI or one SXGC common share.
Throughout all this, the company didn’t look to raise new funds.
And that brings us to the why: “To create a stronger, more dynamic company.”
At least, that’s according to Southern Cross Gold Consolidated boss Michael Hudson, who promised the (slightly confusing) dual-listing structure would soon “provide enhanced market access and trading flexibility for shareholders.”
“The successful implementation of the scheme of arrangement with Southern Cross Gold will create… an improved market presence,” Mr Hudson said.
And, as for the company’s next steps, “We look forward to engaging with our expanded shareholder base and continuing to deliver value through our strategic initiatives.”
As for how shareholders will take it all – once they get their heads around the process – only time will tell; the SX2 listing that went live at 3PM doesn’t have a share price value yet. (It’s not open season on trade until next Tuesday.)
When SXG was suspended yesterday, it was selling at $3.45 a share.
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The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
