Australian Potash exits administration

Australian Potash has announced it exited administration yesterday, with its directors fully back in control of the company, following creditor approval of a deed of company arrangement.

FTI Consulting senior managing director Hayden White and Daniel Woodhouse - voluntary administrators of Australian Potash since December 6 last year - have now ceased their administrative roles.

Subiaco-based Australian Potash entered administration after the company's strategic review failed to attract an investor for its flagship Lake Wells sulphate of potash (LSOP) development in the eastern Goldfields. It subsequently surrendered its mining leases for the development in August due to high holding costs. 

On January 19 2024 during a secondary creditors meeting, the DOCA proposal put forward by Australian Potash's managing director and chief executive officer Matt Shackleton was approved - with Mr White and Mr Woodhouse both appointed trustees of a creditors' trust outlined within the document. 

"This DOCA proposal was reviewed, and the administrators recommended that it was in the creditors’ interests to accept, as it was (in part) assessed to provide for an increased return to creditors, greater certainty of a return and a simplified distribution process, as well as allowing Australian Potash to continue in existence," FTI said in a written statement.

"Following creditor approval of the DOCA, it was effectuated on February 1 2024, allowing the administrators to step down, and for Australian Potash to be returned to the directors as a solvent entity. The DOCA proposal provided for the formation of a creditors’ trust, with the administrators' appointed trustees.

"The creditors trust has now been established with a cash contribution of $900,000, which should see most creditors paid close to 100 cents in the dollar on their debts." 

Aside from re-commencing exploration activities and a likely resumption of trading on the Australian Stock Exchange in March, Australian Potash plans to lodge a prospectus with the Australian Securities and Investments Commission.

"We will shortly lodge a prospectus for the issue of shares to fund the planned exploration programs, heritage and access work," Mr Shackleton said.

"The capital raising process has been managed by Canaccord Genuity and Cumulus Wealth, who will underwrite $2.75 million of the targeted $6 million maximum raise."

Following a priority placement offer of ordinary shares to exisiting shareholders, a general placement will be offered. The price of 0.001 cent per share will apply to both placements. 

The company said one free attaching placement option would be issued for each two ordinary shares subscribed for under both offers, and would be exercisable at 0.0015 cent per share over three years. 

Australian Potash also provided an update regarding changes to its Board.

Rhett Brans and Dr Natalia Streltsova, Australian Potash's chair, resigned from their roles as non-executive directors, with Jonathan Fisher joining the company's Board. 

Joel Ives has also replaced Michelle Blandford as Australian Potash's company secretary.