A salt lake potash project in Western Australia has been tangled in a legal dispute over loan payment arrangements.
A Western Australian salt lake potash project has become tangled in a legal dispute over loan payment arrangements.
Czech investment group Sev.en Global Investments and Piper Preston, trading as SO4, lodged a writ in the Supreme Court of Western Australia naming Global Loan Agency Services Australia Nominees (GLASAN) and Sequoia IDF Asset Holdings as defendants.
In the writ, the plaintiffs alleged an $8.5 million repayment of a loan from the defendants had not been applied properly.
The legal dispute comes a month after SO4 announced successful production at its Lake Way project, which the company bought out of receivership two years ago.
Piper Preston and GLASAN were parties to a security agreement over the Lake Way project in the state’s Goldfields region, the writ said.
The Lake Way project went into receivership but was revived when Piper Preston acquired it from ASX company Salt Lake Potash in 2022.
Sev.en Global Investments is SO4’s parent company.
As part of the restructure and sale in October 2022, Sequoia agreed to lend Piper Preston $33 million in three tranches, according to the writ.
Under the agreement, Piper Preston was to repay $15 million to Sequoia in instalments.
Sequoia appointed GLASAN as an agent and authorised the loan agency to perform duties and responsibilities over the deed signed with Piper Preston.
The writ said Piper Preston did not repay an instalment of $7 million to Sequoia in time and accrued about $2,700 in interest a day.
According to the writ, Sev.en Global agreed to pay $8.5 million to GLASAN to repay Piper Preston’s debt to Sequoia and for the return of its subrogation rights.
But the writ said GLASAN and Sequoia considered Piper Preston to be in default of their facility agreement and intended to return the $8.5 million to Sev.en Global.
The plaintiffs have sought a court order against GLASAN, for the agency to apply the $8.5 million payment to write off Piper Preston’s debt to Sequoia and return Sev.en Global’s subrogation rights.
The matter is scheduled for a hearing at the Supreme Court of Western Australia in early October.
