CHAPMANS AFR ARTICLE

Chapmans taps investors for Canadian crypto-mining play

At a time when the Australian Securities Exchange is closely vetting crypto-currency listings, listed investment company Chapmans is seeking to raise up to $7.3 million to invest in a Canadian crypto-mining and data processing company.

Chapmans, which has a $12 million market capitalisation, is carving out a niche investing in early stage, often low revenue companies which typically operate in hot sectors such as crypto-currency, blockchain, software-as-a-service companies and medicinal marijuana.

Among its most controversial deals has been Capital Mining, which has Chapmans director Anthony Dunlop on its board, and has been in suspension since August regarding ASX queries relating to the remuneration and consultancy payments made to Chapmans.

In a term sheet sent to potential investors on Thursday, Chapmans said it had appointed Perth-based CPS Capital Group to raise funds to invest in Canada's GPU One.


Chapmans shares were placed in a trading halt ahead of a release by the company.

Chapmans plans to buy 50 per cent of GPU One for $C7.5 million upfront and another $C7.5 million on a deferred basis, which the company will fund via a pre-listing raise or proposed reverse take over on the TSX.

"The listing is to potentially occur mid year on the TSX [Canada] where these type of company's [sic] are traded at large premiums," the term sheet said, noting that Chapmans expected to receive a priority allocation.

The email said Chapmans directors and management intend to participate up to $750,000, subject to shareholder approval. It is not clear whether any Chapmans representatives will be appointed directors of GPU One. Chapmans will issue shares at 0.008 cents a share, which include an option, the issue of which remains subject to shareholder approval.

"Should the market totally crash in these currencies [not expected!] the GPU facilities can be relatively easily be converted to a Data Processing/ Storage centre with potential revenues of USD$7m+," the term sheet said. "This is an excellent way of getting exposure in a managed risk way to the new world economy."


Market sources noted that the ASX has been tightly monitoring potential crypto-currency capital raisings and floats as a way to weed out the flood of potential listings that are seeing entry to the ASX, though this raising would give investors a way to have exposure to the sector via an ASX-listed vehicle.

In February, the ASX said it was experiencing "heightened interest" from parties involved in crypto-currency related businesses. The ASX said it would need to be satisfied about how and when they will provide a return to investors and hedge the risks, among other issues. It also noted issues related to crypto currencies, and said they were "equally applicable to existing listed entities wanting to expand their operations into a crypto-currency related business".



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