Mozambique-based Baobab Resources (BAO) halved its full-year operating loss to £1.5m, but attention is now focused on the attempt by major shareholder Redbird Investments (a wholly owned subsidiary of African Minerals & Development) to buy the pig iron group for 6p a share.
Baobab's share price, along with iron ore prices, collapsed during the second half of 2014. And the company requires around $12m (£7.3m) in new funds to complete a viable feasibility study on its flagship Tete project, which contains 759m tonnes of pig iron.
The only trouble is that Baobab was operating with a working capital deficit, so an affiliate of Redbird stepped in with additional bridge financing of $1m. Management has agreed with Redbird that Baobab should de-list from Aim so that it can raise the necessary capital without issuing a prospectus, or without reference to regulatory and listing requirements.
