Voting Exclusion Waiver Could Shift Power Dynamics in Arafura’s Capital Raise
Arafura Rare Earths secures an ASX waiver allowing eligible shareholders to vote on its upcoming Share Purchase Plan, ensuring broader participation in a key capital raising step.
- ASX grants waiver from Listing Rule 7.3.9 for Arafura’s Share Purchase Plan (SPP)
- Eligible shareholders can vote on SPP approval without exclusion
- Voting exclusion applies only to underwriters and sub-underwriters
- SPP to be conducted under a prospectus and subject to shareholder approval
- Waiver prevents disenfranchisement of participating shareholders
Background on the Share Purchase Plan
Arafura Rare Earths Limited (ASX – ARU) recently completed a Share Purchase Plan (SPP) allowing shareholders to acquire new shares up to a certain limit. The company now aims to offer eligible shareholders the opportunity to invest up to an additional A$30,000 worth of shares under the SPP. However, regulatory limits on investment amounts within a 12-month period mean the new offer cannot rely on previous exemptions and must be conducted under a formal prospectus.
The Voting Challenge
Under ASX Listing Rule 7.3.9, when a company seeks shareholder approval for issuing new shares, shareholders who stand to benefit materially from the issue are typically excluded from voting on the resolution. This rule is designed to prevent conflicts of interest but, in this case, would exclude many of Arafura’s eligible shareholders who wish to participate in the SPP from voting on its approval. Such an exclusion could skew the vote and disenfranchise a significant portion of the shareholder base.
ASX Waiver and Its Conditions
To address this, Arafura applied for and was granted a waiver by the ASX on 5 November 2025. This waiver allows the company to include a resolution in its notice of meeting that does not exclude votes from shareholders who may participate in the SPP. The waiver comes with conditions – any votes cast by underwriters or sub-underwriters must be excluded, and shareholders who vote on the resolution will be barred from participating in any shortfall allocation under the SPP.
Implications for Shareholders and the Company
This waiver is significant because it ensures that the shareholder vote on the SPP approval will be more representative of the entire shareholder base, including those who stand to invest further. It prevents a scenario where only ineligible shareholders could influence the outcome, which might have raised concerns about fairness and governance. The SPP itself remains subject to shareholder approval and will be conducted under a prospectus, providing transparency and regulatory compliance.
Looking Ahead
The next steps for Arafura include releasing the notice of meeting with the relevant resolution and the prospectus for the SPP. Shareholders will then have the opportunity to vote and decide on the capital raising initiative that could inject up to A$30 million more into the company. This capital is likely intended to support Arafura’s ongoing development in the rare earths sector, a market of growing strategic importance globally.
Bottom Line?
Arafura’s ASX waiver clears the way for inclusive shareholder voting, setting the stage for a pivotal capital raise.
Questions in the middle?
- How will shareholder turnout and voting patterns influence the SPP approval?
- What are the potential impacts of the additional capital raised on Arafura’s project timelines?
- Could the waiver set a precedent for other companies facing similar voting exclusions?
