Aviva soars on Middlemas proposal

SHARES in Aviva Corporation have soared after the company received a proposal to appoint Ian Middlemas as chairman, which has drawn the ire of its major shareholder.

Kristie Batten

Aviva emerged from a trading halt today with details of the board restructure, as well as a $A1.65 million placement to Middlemas’ company Arredo.

Under the proposal, Arredo would also be issued with 10 million share options for no additional consideration, with each being exercisable at 17.5c per share within four years.

The deal would give Middlemas around 12.5% of the company.

Middlemas is best-known as the former chairman of Mantra Resources, which was taken over by Russia’s ARMZ for $1 billion in 2011.

As part of the proposal, another former Mantra director, Mark Pearce, will join the board of Aviva.

Aviva directors Dr Geoffrey Loftus-Hills, Lindsay Reed and Rob Kirtlan have expressed support for the proposal.

However, Pieter Britz, representative of Aviva’s 14.6% shareholder Sentient Executive, opposes the transaction.

Last week Sentient sought an injunction in the Supreme Court of New South Wales to prevent Aviva from taking any action until yesterday.

Aviva is now free to put the proposal to shareholders and Sentient has agreed to discontinue its court proceedings.

It is expected the meeting will be called in the coming weeks and be held within the next two months.

Aviva also received a notice from Sentient of its intention to remove Loftus-Hills, Reed and Kirtlan as directors and replace them with its own nominees.

Those resolutions will be put to shareholders at the same meeting.

Reed, Aviva’s chief executive officer of 10 years, resigned in December but it has been agreed he will stay on until the meeting is held.

The company has suspended its search for a new CEO until the matter is resolved.

Aviva had cash of $20 million at the end of December after selling its Tanzanian gold projects to African Barrick Gold last year.

It subsequently sold its Coolimba project in Western Australia but retains a stake in the Mmamantswe coal project in Botswana.

Shares in Aviva shot up by as much as 30% to an intraday high of 18.5c but closed 26% up to 27c.