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Friday, July 27, 2012

Metal Storm in voluntary administration

Per The Sydney Morning Herald:

Defence technology company Metal Storm has been placed in voluntary administration.
The company today said it had appointed Adam Shepard and Adam Farnsworth of Dean-Willcocks Shepard Recovery & Strategy as administrators.
Metal Storm said it was hoped its business could be restructured or sold as a going concern.
No details were given about the future of the company's workers.
‘‘The administrators are now in control of Metal Storm and will work with all stakeholders including employees, the note holders, other creditors and shareholders in an attempt to restructure the company or sell it as going concern,’’ the company said in a statement.
In its annual report released early in 2012, Metal Storm said it employed 21 staff as at December 2011.
The company’s collapse comes after it entered into an umbrella deed with Australian Special Opportunity Fund (ASOF) and Luxinvest Capital Advisors, and a related subscription agreement with Luxinvest in April.
The aim of the deals was to eliminate $11.9 million worth of Metal Storm’s secured debt and provide $2.95 million in working capital.
However, Metal Storm said Luxinvest was unable to complete the agreement as required on July 18.
As a result, ASOF terminated the umbrella deed the following day.
Metal Storm, which develops grenade launchers and other weapons systems, flagged in June that it would need to find alternative funding if the deed was terminated.
It also warned that if it did believe it would be successful in obtaining an additional source of funding, its board may have to appoint an administrator.
‘‘Since the termination of the umbrella deed, Metal Storm has been attempting to obtain additional funding to allow the company to continue operating,’’ the company said.
‘‘However, after considering all of the available options for Metal Storm and after carefully reviewing the company’s financial position, the board has determined that the appointment of the administrators is necessary and in the best interests of Metal Storm’s creditors and shareholders."
Shares in Metal Storm, which is based at Darra in Queensland, have not traded since the company requested they be suspended from trading on July 20.

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