Brisbane, April 21, 2006 AEST (ABN Newswire) - Metal Storm Limited (ASX: MST)(NASDAQ: MTSX) today announced its intention to raise up to $25 million of new capital in stages, opening with a Share Purchase Plan to raise up to $10 million and to give as many shareholders as possible the opportunity to participate.
The Share Purchase Plan is designed to allow eligible shareholders to subscribe for new shares in Metal Storm at a discount to the market price and free of all brokerage, commission and stamp duty. Further details of the Share Purchase Plan are set out below.
Once the results of the Share Purchase Plan are known the Company will act to secure such additional funding as is necessary from other sources available to it. The timing and format of such additional funding will be determined in accordance with the Company's objective of seeking to minimize any dilution of existing shareholders wherever possible.
The evaluation and consideration of a balanced capital offering have been in planning for some time and the Board has decided on the staged process as being in the best interests of shareholders.
The capital raised will be used to fund the advancement of the Company's commercialization strategy and to finance specific product output programs. Details of the use of funds and specific projects will be supplied with the Share Purchase Plan offer documents.
Directors believe that the Company's focus on its 40mm weapons technology, the achievement of key development milestones, and the development of key relationships with defence organizations and commercial partners over the past 18 months has created a solid platform for the achievement of its initial commercial objectives. The recent unveiling of the Redback(tm) Weapon System in conjunction with Electro Optic Systems Holdings Ltd and the successful firing of high explosive munitions in conjunction with Singapore Technologies Kinetics are pivotal events which underpin these objectives. (see the footnotes below for further information).
Under the terms of the Share Purchase Plan announced today eligible shareholders may subscribe for up to $5,000 worth of fully paid ordinary shares in the Company at a subscription price set at 80% of the higher of:
(a) the average of the daily volume weighted average sale price of Shares sold on ASX during the last 5 days on which sales of fully paid ordinary shares were recorded immediately prior to the issue date (not including any transactions defined in the ASX Market Rules as "special", crossings prior to the commencement of normal trading, crossings during the after hours adjust phase, nor any overseas trades or trades pursuant to the exercise of options over shares and any other sales which the directors consider may not be fairly reflective of natural supply and demand); or
(b) the average Closing Price of fully paid ordinary shares (excluding special crossings, overnight sales and exchange traded option exercises) during the last 5 days on which sales of fully paid ordinary shares were recorded immediately prior to the issue date.
Eligible shareholders may make application to acquire parcels of shares in $1,000 increments from a minimum of $1,000 to a maximum of $5,000. If subscriptions for more than $10 million are received, the directors may scale back allotments in the manner and to the extent they consider appropriate in their discretion. The directors may, in their discretion, accept oversubscriptions.
Subscribers will not be required to pay the brokerage or other transaction costs that would normally apply to an on-market purchase of shares. The Share Purchase Plan will provide an opportunity for those shareholders with less than marketable parcels to increase their holdings to a marketable parcel without transaction costs.
The right to participate in the offer of Metal Storm Limited Shares under the Share Purchase Plan is available exclusively to those Shareholders who are registered as holders of fully paid ordinary shares in the Company as at 7.00 p.m. (AEST) on 24 April 2006 (the Record Date) and who have a registered address in Australia or New Zealand, unless they hold those shares on behalf of a person who resides outside Australia or New Zealand. There are also special rules for trustees or nominees who are expressly noted on the register as holding for the benefit of another person.
The maximum number of fully paid ordinary shares which may be issued under the Share Purchase Plan is approximately 156,618,112. However, the number of shares which will actually be issued is expected to be lower, given the amount sought to be raised and the anticipated issue price.
Shareholder approval will not be required for the issue of those shares.
An Offer Letter, Terms and Conditions of the Share Purchase Plan and an Application Form will be dispatched to eligible shareholders following the Record Date.
All enquiries regarding the Share Purchase Plan should be directed to the Company Secretary, Mr Jim MacDonald on 07 3221 9733 or via the Shareholder Feedback email facility on the Company's website: www.metalstorm.com
Contact
US
Investor queries:
David Smith
Metal Storm
TEL: +1 703 248 8218
Australia
Investor queries:
Ian Gillespie
Metal Storm
TEL: +61 (0) 7 3221 9733
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