Bresagen attempts to broaden shareholder base

Having struck out in an attempt to broaden its shareholder base through a rights issue last month, Bresagen (ASX:BGN) will be asking shareholders to expand the range of investors who can subscribe to its back-up convertible note facility.

And it may be needed soon. At the end of March the company had cash on hand of only AUD$738,000.

In March, Bresagen cancelled a non-renounceable rights issue which it had hoped would raise AUD$8.8 million, citing failure to meet the minimum subscription of $2 million.

In October last year, as part of the reinstatement of its securities after a year in voluntary administration, shareholders approved a $3.4 million convertible note facility under which Queensland biotech CBio is able to subscribe to 34 convertible notes, raising CBio's shareholding in Bresagen from 49 per cent to more than 60 per cent.

Shareholders will now be asked, at an extraordinary general meeting, to approve the issue of 10 of those convertible notes to sophisticated investors and seven to Australian Technology Innovation Fund, reducing CBio's obligation.

Bresagen company secretary Bryan Dulhunty said the company did not want to use the facility as this would dilute existing shareholders. He said Bresagen was still interested in a share placement as the board was keen to enable existing shareholders to come in at current prices.