Australian uranium explorers Deep Yellow, Vimy agree on $493 mln merger deal

DEEP YELLOW

31/03/2022 01:48

March 31 (Reuters) - Australia-listed uranium explorers Deep
Yellow Limited  DYL.AX  and Vimy Resources  VMY.AX  agreed on a
A$658 million ($493.24 million) merger of its business, the
companies said in a joint statement on Thursday. 
    The deal comes as uranium prices  UXXc1  nearly doubled last
year amid a global push for renewable power, including a
commitment by France to build at least six new nuclear reactors
in a push for carbon neutrality by 2050. Prices surged further
since February by the sharp rise in power rates in Europe
following Russia's invasion of Ukraine.
    Both companies have agreed to a merger by a Scheme of
Arrangement, under which Deep Yellow will acquire 100% of the
Vimy shares on issue, the statement said. 
   Each shareholder of Vimy will receive 0.294 Deep Yellow
ordinary fully paid shares for every ordinary fully paid Vimy
share held. If a merger goes through, Deep Yellow shareholders
will hold 53% of the combined entity and Vimy shareholders will
take the remainder stake, according to the statement.
    "The expanded strong technical team of Deep Yellow, together
with Vimy personnel, positions us well to bring both projects
online when uranium prices support the generation of long-term,
sustainable positive cash flows," said John Borshoff, managing
director and chief executive officer of Deep Yellow.
    The merged entity is estimated to have a pro-forma market
capitalisation of approximately A$658 million, cash and
equivalents of approximately A$106 million and no balance sheet
debt.
    Vimy's board unanimously recommends that shareholders vote
in favour of the Scheme, in the absence of a superior proposal.
    Paladin Energy  PDN.AX , another Australian uranium
production company, said in a statement it wants to raise more
than A$200 million in capital to help restart its Langer
Heinrich uranium mine in Namibia.  urn:newsml:reuters.com:*:nFWN2VX1I0
    
     ($1 = 1.3340 Australian dollars)

 (Reporting by Praveen Menon; Editing by Sherry Jacob-Phillips)
 ((praveen.menon@thomsonreuters.com; +6448028163; Reuters
Messaging: praveen.menon.thomsonreuters.com@reuters.net;
Twitter: https://twitter.com/Journopraveen))