Mining services company Viento Group has gone into administration, despite having won major new contracts in the past month with iron ore miners BC Iron and Rio Tinto.
Mining services company Viento Group has gone into administration, despite having won major new contracts in the past month with iron ore miners BC Iron and Rio Tinto.
The company’s shares were suspended from trade on the ASX following the announcement, appointing Cameron Shaw, Richard Albarran and Brent Kijurina from Hall Chadwick as external administrators.
Last month, Viento won a $40 million contract to provide mining, crushing and screening work at BC Iron's Nullagine joint venture operation, after the iron ore miner terminated Watpac Civil & Mining's contract for the same job three months early, in a cost-saving initiative.
In a statement, BC Iron said Viento had commenced mining at Nullagine and was currently mobilising equipment to the site.
"BC Iron will continue to monitor the situation and advise the market accordingly," it said.
"However, the company doesn't currently anticipate this development will materially impact operations."
Managing director Morgan Ball said he had been in contact with Viento, and was assured that it would be business as usual with respect to Nullagine.
“As I understand it, our contract with Viento is quite important to them from a cash flow perspective. They’re mobilising their equipment to site and they’re operating, so we would anticipate that would continue while they work through the other parts of their business that are causing challenges,” Mr Ball said.
“With that said, we will watch it closely.”
Viento was also awarded a $7.3 million contract to the construction of a tailings storage facility for Rio Tinto last month.
In early March, Viento announced plans to conduct a discounted $7 million rights issue, with Patersons Securities appointed as lead manager and was in negotiations to have Patersons potentially underwrite the issue up to at least $6 million.
The rights issue was to be used to provide working capital and reduce debt.
It had also appointed former Maca boss Doug Grewar as its managing director, shortly after it reported a net loss of $14.5 million for the half-year to December.
However at the beginning of April, Viento announced to the market that it had received a $2 million loan facility from its directors Ray Munro and John Silverthorne.
Viento shares were trading at 3.6 cents a share before they entered suspension.
