Australian Potash directors have appointed voluntary administrators to the company in a bid to avoid litigation through a sale of the business.
Australian Potash directors have appointed voluntary administrators to the company in a bid to avoid litigation through a sale of the business.
The Subiaco-based project developer told the market that FTI Consulting senior managing directors Hayden White and Daniel Woodhouse were appointed as voluntary administrators this morning.
It comes after a strategic review failed to attract an investor for its flagship Lake Wells sulphate of potash (LSOP) development in the eastern Goldfields. Australian Potash surrendered its mining leases for the development in August due to high holding costs.
Today's update follows the collapse of fellow potash aspirant Kalium Lakes, which went into receivership after failing to get its flagship project up to nameplate capacity.
In Australian Potash's ASX statement, the developer said its directors believed a formal restructuring process should take course after continued and exhaustive engagement with shareholders and creditors over the past several weeks.
The first statutory meeting of creditors is expected to take place on December 15, according to a statement from FTI Consulting.
"Australian Potash’s further efforts in raising capital have been unsuccessful and consequently, the directors have determined to appoint voluntary administrators to the company," FTI said.
"The directors have determined not to appoint voluntary administrators to the subsidiary entities of the company.
"The administrators intend to pursue a realisation strategy involving a sale of [Australian Potash's] business and assets and/or a recapitalisation of the company via a deed of company arrangement."
Australian Potash directors will be working with shareholders and third-party investors to submit a recapitalisation proposal to administrators, in a bid to avoid liquidation, the company said.
“It is the view of the board that the company’s assets represent an opportunity to create value for shareholders,” the company’s ASX statement said.
“For example, the reassessment of the exploration model and drill assay results from the work conducted at the Lake Wells Gold Project by former joint venture partner, St Barbara Ltd, has identified several ‘walk-up’ in fill drill targets.
“With a reconstructed balance sheet, the company will be able to pursue these and other exploration opportunities across its existing project areas.”
Australian Potash non-executive chair Natalia Streltsova said this was a disappointing day for the company’s shareholders and team.
“The last two years have been very challenging for your company with much focus and effort initially on identifying the funding solution for the LSOP,” she said.
“I can assure you that no stone remained unturned in our pursuit of funding for the LSOP development because we believe the project has considerable value for all stakeholders, both economic and social.
“We still maintain the project information and know-how and will be ready to deploy them should a new opportunity emerge for this project.
“More recently, due to strong negativity in the market towards solar evaporation potash projects in Western Australia, we turned our efforts to re-focusing the company on our other existing project opportunities where we believe we have project targets that have the potential to create significant shareholder value.
“Notwithstanding this appointment, we continue to work diligently to retain and restore as much value for shareholders as we can in the circumstances.”
Dr Streltsova said the team aimed to update stakeholders in the very near future.
