Carbon Revolution fails to answer ASX query

The Australian Securities Exchange has continued the suspension from trading of the shares in carbon fibre road wheel manufacturer Carbon Revolution following its failure to identify a US company it is negotiating with.

The Geelong company’s shares were first suspended at CBR’s request following its revelation earlier this month that it had signed a non-binding letter of intent to merge with a US special purpose acquisition company (SPAC) which it did not name.

Dubbing the new entity MergeCo, the merger would immediately make available US$50 million in capital from a Committed Equity Fund, as well as cash which would likely be ‘substantially less than US$200 million’.

The ASX then sent off a series of 10 questions to the company which included a request for the company to identify the North American SPAC.

While CBR responded to the other nine questions, it was unable to name the entity.

Carbon Revolution said it was subject to confidentiality obligations and US securities law considerations.

It told the exchange: “Carbon Revolution has pressed thr SPAC for its approval to be names in the context of this correspondence (from the ASX) and has been unable to obtain the SPAC’s consent.”

Carbon Revolution said that the identity of the SPAC was not information that was material to the price or value of the company’s shares.

The only material information related to the cash held by the SPAC and its capital structure, which has been disclosed.

“Carbon Revolution considers that naming the SPAC may have a significant detrimental impact on the proposed transaction.

“This is because naming the SPAC may result in the SPAC withdrawing from the proposed transaction.”

However the ASX was clearly not convinced by these answers, issuing a statement and continuing the company’s suspension from trading for reasons ‘including, but not necessarily limited to’ its inability to name the SPAC.

In the past year Carbon Revolution shares have traded between 19 cents and $1.24. When shares were suspended they were trading at 34 cents, valuing the company at $78.6 million.

Further reading:
CARBON REVOLUTION LOOKS TO MERGE, LIST IN THE US

Picture: Carbon Revolution