RNS Number : 2331E
Creat Resources Holdings Ltd

16 December 2009

Creat Resources Holdings Limited

UPDATE ON FUNDRAISING and acquisition

Creat Resources Holdings Limited (the "Company") (AIM: CRHL) is pleased to announce the following information:

Completion of First Round Fundraising ("First Round Fundraising")

The Company has completed the share placement described in the announcement dated 9 December 2009 (the "Announcement"), resulting in the issue of 114,000,000 ordinary shares of the Company (the "Placing Shares") at 5p per ordinary share and raising £5.7m before expenses. These funds will be used for, among other things, working capital purposes and/or for acquiring additional businesses. In order to facilitate the First Round Fundraising, the Company and the subscribers agreed to amend the subscription agreements that had previously been entered into to make the subscriptions unconditional. The three subscribers (the "Investors") are from the People's Republic of China, whose details and ownership of shares are listed below.

Following the issue of the Placing Shares, there will be 567,276,674 ordinary shares of the Company (the "Ordinary Shares") in issue (the "Enlarged Share Capital"). The Placing Shares constitute 20.10% of the Enlarged Share Capital.

The shareholdings of the Investors in the Enlarged Share Capital are as follows:

Silvermine Industries Limited ("Silvermine")
68,000,000 shares
11.99%

Xinao Asia Capital Management Limited ("Xinao")
36,000,000 shares
6.35%

Ever Trade Holdings Limited ("Ever Trade")
10,000,000 shares
1.76%

Silvermine Industrial Limited is a limited company incorporated in the British Virgin Islands. Xinao, a limited company incorporated in Hong Kong, is associated with ENN Group, an integrated group of companies focussing on clean energy. Ever Trade, a limited company incorporated in the British Virgin Islands, is associated with High Tech Wealth. Hi-Tech Wealth is an integrated multi-channel sales and marketing company in China which develops and sells branded digital mobile devices.

Application will be made for the Placing Shares (which will rank pari passu with the existing Ordinary Shares) to be admitted to trading on AIM when the Company is restored to trading on AIM. 

Acquisition of 6,818,192 ordinary shares in Galaxy Resources Limited ("Galaxy")

As described in the Announcement, Creat Group Co Limited ("Creat Group"), the controlling shareholder of the Company, entered into an agreement with Galaxy on 21 August 2009  under which it agreed to subscribe for 19.9% of the issued share capital of Galaxy (the "Galaxy Equity Agreement"). Creat Group intends to nominate the Company as the subscriber under the Galaxy Equity Agreement so that the Company will subscribe for new ordinary shares of Galaxy representing approximately 19.9% of Galaxy's enlarged ordinary share capital (the "Galaxy Subscription") by way of an initial subscription ("Initial Subscription") and a further subscription in respect of the balance to occur during the first quarter of 2010 (the "Second Subscription").

The Company is pleased to announce that it has today applied to subscribe for 6,818,182 ordinary shares in Galaxy at A$0.88 per ordinary share, representing approximately 4.6% of Galaxy's enlarged ordinary share capital, after having been nominated by Creat Group to complete the Initial Subscription (the "Nomination").  A$6m of the funds raised in the First Round Fundraising will be applied to the Initial Subscription. In accordance with the AIM Rules for Companies, the Nomination is a Rule 13 Related Party Transaction and the Company's independent directors, having consulted with the Company's nominated adviser, consider that the Nomination is fair and reasonable insofar as its shareholders are concerned.

The Nomination is made between Creat Group and the Company. No consideration is payable in respect of the Nomination except the subscription price of A$0.88 per Galaxy share payable to Galaxy, amounting to an aggregate of approximately A$6 million.  As previously announced, Galaxy is an ASX listed Australian mining and materials company focusing on lithium and tantalum exploration and production. According to the audited financial statements of Galaxy for the year ended 30 June 2009, Galaxy made a net loss of A$2,713,478. As at the close of trading on 15 December 2009, the price per Galaxy share on the ASX was quoted as A$1.355.  Further information on Galaxy can be found at www.galaxyresources.com.au.

As previously announced, if the Second Subscription is agreed with Creat Group and entered into by the Company, the Second Subscription will constitute a reverse takeover under Rule 14 of the AIM Rules for Companies (the "Proposed Reverse Takeover"), requiring the issuance by the Company of an AIM admission document and the approval of the Company's shareholders at a general meeting prior to completion of the Proposed Reverse Takeover.  It is the Company's current intention that the admission document will be sent to shareholders in January 2010.

As previously announced, in order to fund and complete the Proposed Reverse Takeover, the Company will need to raise further funds by way of an additional placing of Ordinary Shares or through other forms of finance ("Additional Funding"). The Company is currently seeking to secure such Additional Funding.

Managing Director Mr Xiaojian Ren said "This is an exciting time for the Company. The Board and its shareholders set the goal of expanding its operations and resource diversification and today's announcement is evidence of the Company's rapid progress to those goals."

The Company will make further announcements in due course updating shareholders on the Proposed Reverse Takeover and the Additional Funding.

For further information please visit www.creatresources.com or contact:
Creat Resources Holdings Limited
Yasmine Healy
Tel: +61 (0) 36216 2705

Grant Thornton Corporate Finance
Nominated Adviser
Philip Secrett, Maureen Tai
Tel:+44 (0) 20 7383 5100

Westhouse Securities Limited
Broker
Tim Metcalfe, Richard Baty
Tel: +44 (0) 20 7601 6100

First City (China) Limited
Public Relations Adviser
Lei Jiang
Jane Absolom
Tel: +852 2854 2666
Tel: +44 (0) 20 7920 3170