The administrators of West Perth-based Baraka Petroleum have returned control of the company to the directors as chief executive Mark Fenton steps down.
At a meeting late last week, creditors passed a resolution terminating the company's voluntary administration status which was entered into in early May.
The company was placed in administration after failed attempts to raise capital and asset divestment to allow it to meet its commitments under the La Punta acquisition agreement and commitments on its West African projects.
In a statement today, the company said it had been able to repay or is about to repay its creditors in full.
In addition, Baraka is already in talks with potential financiers to allow it to meet certain requirements prior to reinstatement to trading.
Meanwhile Mr Fenton has resigned as a director and CEO effective immediately and Ricardo Garzón will join the board.
Below is the full announcement:
Baraka Petroleum Limited ("Baraka" or "the Company") is pleased to advise that at a reconvened meeting of creditors held on 31 July 2008, creditors passed a resolution terminating the Voluntary Administration and returning control of the Company to the Directors.
Kimberly Strickland and Chris Williamson ceased to act as Joint and Several Voluntary Administrators of the Company on 31 July 2008 with all outstanding creditors paid or due to be paid in full.
The Board of Directors is extremely pleased that the Company has been able to repay all creditors in full and avoid a liquidation or arrangement with the Company's creditors that would have necessitated a further loss of value for shareholders. As part of the settlement of all of the Company's outstanding liabilities and commitments, the Company has:
Withdrawn from the Mali Joint Venture effective 31 May 2008. This withdrawal and the signing of an Assignment Agreement with the joint venture partners has released Baraka from all its obligations and liabilities in respect of the joint venture;
Entered into a Settlement Agreement with the La Punta Joint Venture partners releasing Baraka from all its obligations and liabilities in respect of the La Punta Joint Venture whilst acknowledging the termination of Baraka's participation in the La Punta Joint Venture; and
Signed an Assignment Agreement with the Chicuaco Joint Venture partners releasing Baraka from all its current and future obligations and liabilities in respect of the joint venture in return for assigning its 20% interest in the joint venture to the partners.
The Company retains its 25% free carried interest in the Ta11 and Ta12 Mauritanian oil exploration licenses. The current free carry takes Baraka through the currently approved work programme.
The Board has also commenced discussions with the Australian Securities Exchange ('ASX') regarding the necessary requirements for the Company to be reinstated to trading.
The Company currently expects to have to meet certain requirements prior to reinstatement to trading, including securing further funds to sustain its operations for an adequate period. The Board has already commenced discussions with potential financiers that would allow Baraka to meet those requirements in the shortest possible time-frame.
The Board of Directors would like to thank the Voluntary Administrators Chris Williamson and Kim Strickland and the other staff of WA Insolvency Solutions for their work during the period of the Voluntary Administration. The Directors would also like to thank Baraka staff, consultants, creditors and shareholders for their patience and support during this difficult period for the Company.
With the end of the Voluntary Administration, Dr Mark Fenton has resigned as a director and the position of Chief Executive Officer effective immediately. The Board would also like to thank Dr Fenton for his contribution during his period with the Company. Mr Ricardo Garzón will join the Board of Directors immediately.
The Board of Directors is now committed to seeking reinstatement to trading as soon as possible and to assessing new business opportunities for the Company with a view to restoring shareholder value at the earliest opportunity.