PERTH (miningweekly.com) – Emerging iron-ore junior Flinders Mines has applied for a de-listing from the ASX, saying it would be in the best interest of shareholders.

The decision to de-list from the ASX followed a strategic review of the available options to maximise shareholder value, on the back of a number of challenges to progress the Pilbara iron-ore project.

The company said on Thursday that the decision to de-list was in the best interest of shareholders, given the lack of capital support from public markets, the low levels of trading liquidity of Flinders shares, concentrated shareholding, the costs associated with maintaining a listing on the ASX, greater potential access to future funding alternatives as an unlisted company, and the company’s material future capital requirements.

“The board of Flinders does not believe it is in the best interest of shareholders to continue incurring the costs and administrative burden associated with a listing that is ineffective; it has extremely low liquidity and has proven inadequate in raising capital from public markets, particularly against the backdrop of significant future funding requirements to deliver the Pilbara iron-ore project,” said Flinders chairperson Neil Warburton.

“The board is committed and will continue to progress the project as a public unlisted company,” he added.

The ASX has given in-principle approval for the de-listing, subject to shareholder approval.

Meanwhile, Flinders also announced the on-market buy-back of up to 10% of its shares on issue, at a price equal to the lower of a 5% premium to the five-day volume weighted average share price, or 7.5c a share, representing the 30-day volume weighted average share price.

The buy-back is conditional on shareholders approving the de-listing.

To fund the buy-back, the company has entered into a short-term loan facility with PIO Mines for A$27-million, with the actual amount to be drawn down dependent on the number of shares purchased.

Furthermore, Flinders will also undertake an unmarketable parcel sales process and a rights issue, aimed at repaying the loan facility from PIO Mines.

A shareholder meeting to approve the de-listing has been scheduled for late January.