Arcon shareholders have voted to establish a separate oil and gas company and permit Arcon to focus exclusively on its mineral interests. At an extraordinary general meeting yesterday, a resolution to set up Providence Resources, a new company with its own listing, was carried unanimously by shareholders.

Arcon chief executive, Mr Tony O'Reilly jnr, said fund managers had reached a consensus that oil and gas interests and mining interests did not fit well within a single company.

According to Mr Brendan Gilmore, Arcon chairman, shareholders will "retain a flexibility to invest in either company". He said Providence shares would be launched on the exchange at 2.3p, which is the net asset value.

Arcon also announced yesterday that NatWest Markets, the investment arm of the National Westminster Bank Group, had underwritten a new $85 million (£59.4 million) facility for the company.

The proceeds of this new facility will be used to repay the original limited resource project finance facility. The balance will be used by Arcon to strengthen its balance sheet and to invest in mining and mineral projects.

Mr O'Reilly said the NatWest facility would "considerably reduce lending rates and provide substantial resources for future investment".

Some shareholders at yesterday's e.g.m. expressed concern that, with the transfer of some assets from Arcon to Providence, Arcon's share price might fall.

Mr O'Reilly said this would not happen as Arcon's share price was more closely related to the price of zinc, which was rising. Another shareholder asked the board about recent media reports concerning companies finding alternative materials than zinc to use in manufacturing. "There are always stories like that circulating but recent figures have shown, for instance, zinc consumption in the automobile industry, rising," said Mr O'Reilly.

Under the demerger, Arcon shareholders will be eligible to receive one share in Providence Resources for every one share held in Arcon.

The demerger is subject to approval from the High Court which will be sought today and a stock exchange listing will be sought in the first week of September.

Mr O'Reilly said he believed Arcon was undervalued and he hoped the new focus on purely mineral interests would be recognised.

He added that Arcon was "reviewing" possible ways to "tidy up the share register", a reference to the large number of very small shareholders in the company. Some 10,000 shareholders in Arcon have less than 1,000 shares.