Red Metal (ASX:RDM) said it will convene an extraordinary general meeting to consider and vote on an in-specie distribution of the majority of its shareholding in Maronan Metals (ASX:MMA), according to a Tuesday Australian bourse filing.

The company said it currently holds 88.5 million MMA shares, representing 35.2% of total MMA shares on issue, with eligible shareholders entitled to receive one MMA share for every 5.25 Red Metal shares held at the record date of May 14, if the distribution is approved.

Following the distribution, Red Metal will retain about 15.4 million MMA shares, with the board unanimously recommending shareholders vote in favor of the distribution, it added.

Red Metal added that each of its directors intends to vote any Red Metal shares held or controlled by them in favor of the distribution.

Red Metal's shares rose 10% on market close, while Maronan Metals fell almost 2%.