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ISR Capital : Response to SGX Queries

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by August 14, 2016 General

ISR CAPITAL LIMITED(Company Registration No. 200104762G) (Incorporated in the Republic of Singapore) (the “Company”)‌‌RESPONSES TO SINGAPORE EXCHANGE SECURITIES TRADING LIMITED’S QUERIES ON THE COM PANY’S ANNOUNCEM ENTS ON THE PROPOSED ACQUISITION OF 60% STAKE IN TANTALUM HOLDING (MAURITIUS) LTDThe Board of Directors (the “Board”) of ISR Capital Limited (the “Company”) wishes to provide the following information in response to the queries raised by Singapore Exchange Securities Trading Limited (“SGX-ST”) dated 10 August 2016 and 11 August 2016:-Query by SGX-ST:We refer to the Company’s announcements on 20 May 2016 and 18 July 2016 relating to the acquisition of Tantalum Holding (Mauritius) Ltd (“Project”) from Reo Magnetic Pte. Ltd (“Reo Magnetic”). Based on public information disclosed by Tantalus Rare Earths AG (“TRE-AG”), a company quoted on OTC Market Duesseldorf, TRE-AG had sold the Project to REO Magnetic in 2016. The Company’s director David Rigoll was a director and controlling shareholder of TRE-AG at the point of sale to REO Magnetic.The Company disclosed that “(t)he Board and the AC are of the view that Mr. Rigoll has no interest in the Project other than through his interest as a shareholder of the Company”. In publicly disclosed information by TRE-AG, Aston Nash holds 32.7%, David Rigoll 0.78% of TRE-AG and that “[t]he shares of Aston Nash Limited have to be attributed to Mr. David Rigoll, who holds 33,35% of TRE AG”. Please disclose when David Rigoll sold off his interest in TRE-AG.Company’s Response:The Company understands that the 32.7% shareholding held by Aston Nash in TRE-AG was agreed to be sold in December 2015, and completed on 30 April 2016. As of 30 April 2016, Mr David Rigoll has sold off all his interest in TRE AG.Query by SGX-ST:In the Company’s announcement on 1 July 2016, it was disclosed that the Company appointed Empire Capital Partners Pty Ltd as corporate advisors for the Company’s acquisition of the Project. Please disclose the date of appointment of Empire Capital Partners Pty Ltd and why was it necessary to appoint them as corporate advisor for the acquisition when the Sales & Purchase Agreements for the acquisition were already signed on 9 June 2016 and 30 June 2016 respectively. Please disclose the terms of the appointment, the responsibilities of Empire Capital Partners Pty Ltd and their role in the acquisition. Please quantify the fees payable to Empire Capital and the basis how the fees were calculated.Company’s Response:The letter of engagement with Empire Capital Partners Pty Ltd (“Empire”) dated 21 May 2016 was accepted by the Company on 26 May 2016.Basis for appointment:Empire was appointed principally to take a lead in corporate advisory, which include coordinating a site visit to Madagascar and facilitating the conduct of a preliminary due diligence. Shareholders should note that while it may seem that structuring of a corporate acquisition typically falls on the role of a lawyer or tax advisor, fund raising is yet another aspects which is also required for the success of an acquisition. In an acquisition which requires fund raising, the structure of the acquisition would have to be acceptable to potential investors from, for example, a capital structure point of view. Empire is principally engaged to manage the fund raising for the Project which requires funds for its pilot production. Empire’s expertise and track record is in corporate advisory and capital raising for companies in the natural resources sector in emerging markets.Shareholders should note that the acquisition has not been completed as at the date of this announcement and advisory from a legal taxation, corporate and industry perspective will continue to be required up to and beyond completion of the acquisition.The terms of the appointment, the responsibilities of Empire Capital Partners Pty Ltd and their role in the acquisition are as follows:As requested by the SGX-ST, the Company sets out the scope of Empire’s role below:“As corporate advisor to the Company, Empire will perform the following functions (“the Services”):Assist the Company in the assessment of certain market information and business strategies relevant to the operations of the Company;Assist the Company in reviewing, evaluating and structuring any proposed transaction;Assist the Company in developing a general negotiating strategy and in actual negotiations with potential investors and consult with and assist counsel and independent accountants in structuring and carrying through to settlement any agreement which may be reached;Assist the Company in preparing summary information (the ‘Information”) with respect to the Company for distribution to potential investors selected by Empire and the Company, describing the Company and its business, it being specifically agreed that (a) the Information shall be based entirely upon information supplied by the Company (or public information), and the Company hereby warrants that, to the best of its knowledge, the Information supplied shall be complete and accurate in all material respects, and not misleading and (b) Empire shall not be responsible for the accuracy and completeness of the Information except as it pertains to public information derived from research performed by Empire.As requested by the SGX-ST, the Company sets out the salient terms of Empire’s appointment below:“This Agreement shall have an initial term of 3 months from the date of this Agreement set forth above and can be continued by mutual consent for an agreed period of time. Either party may terminate this Agreement at any time if the other party is in material breach of this Agreement, on written notice to such party. Notwithstanding the foregoing, no expiration or termination of this Agreement shall affect: (a) the Company’s indemnification, reimbursement, contribution, and other obligations as set forth in this Agreement; (b) the confidentiality provisions; (c) Empire’s right to receive, and the Company’s obligation to pay, any fees and expenses due, whether or not any transaction is consummated before or after the effective date of termination, all as more fully set forth in this Agreement and (d) the agreements of the Company and Empire with respect to choice of law and forum.”As regards to the payment terms of Empire’s appointment, please note that the Company is bound by confidentiality terms with Empire and is not at liberty to disclose to the general publicon the details of the payment terms. What shareholders should note is that the payment term is performance based, on a reasonable percentage of the total fund successfully raised.Query by SGX-ST:Please disclose the track record, controlling shareholders, directors and key management of Empire Capital Partners Pty Ltd and why Empire Capital Partners Pty Ltd had to be engaged as the corporate advisor for the acquisition.Company’s Response:The directors and key management of Empire Capital Partners Pty Ltd (“Empire”) are as follows:Mr Paul D’Sylva – PartnerMr Timothy Morrison – PartnerMr Rob Hamilton – DirectorMr Cameron Williams – Associate DirectorEmpire has advised that their shareholding structure is commercial in confidence and they are not prepared nor obliged to share it publicly.Track record of Empire Capital Partners Pty Ltd:Empire has extensive knowledge of Mineral, Oil and Gas (“MOG”) assets and regularly works with technical professionals in the MOG industry. Empire’s expertise and track record is in corporate advisory and capital raising for companies in the natural resources sector in emerging markets. Empire has raised over A$500 million for clients in the last seven (7) years and has closed eight (8) transactions with a total raise of A$70 million in the last six (6) months.Empire has strong relationships with strategic global investors and a good understanding of funds investment criteria. Empire’s recent team additions bring further distribution capacity in alternative capital sector. Empire has raised capital globally for clients and they have a strong relationship with North American funds and a strong presence in the Asia Pacific region.Why engage Empire:

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