ASCENT Capital has signed a deed of company arrangement that will breathe life into failed listed weight loss player Metabolism Health Limited.
It will reopen the company’s Subiaco centre and start the process of raising $1.5 million in new capital to get the business growing.
The deed of company arrangement is still to be approved by share-holders, as are the plans to raise further capital.
The former directors of Metabolism Health Jim Cowling, Joseph Ohoyan and David John have stepped down and been replaced by Ascent directors Gary Steinepreis, David Steinepreis and Hugh Warner.
Metabolism Health, renowned for being one of the shortest listings in Australian Stock Exchange history – it lasted little more than a month – only owed about $200,000.
Ernst & Young partner Brian McMaster, who was appointed administrator of Metabolism Health, is confident of creditors receiving 100 cents in the dollar.
There was a claim of $751,400 from Carfee Pty Ltd that is still out-standing. That figure was 10 times what was owed to other unsecured creditors.
Mr McMaster said he had received details of that debt from Carfee but disputed that the debt was linked to Metabolism health.
He said it was a matter that should be directed to Metabolism Health subsidiary The Metabolism Centre.
Meanwhile, The Metabolism Centre, has been forced into liquidation under the weight of debts totalling between $6 million and $7 million.
About $4.4 million of that was owed to Metabolism Health.
As part of the deed of company arrangement, Ascent Capital will buy equipment from The Metabolism Centre for about $185,000.
That money will come from Ascent.
However, it is unlikely that much, if any, of that money will flow to the 200 or so unsecured creditors of The Metabolism Centre.
Featherby Reilly partner Mark Reilly, who was appointed administrator of The Metabolism Centre, said his fees would come out of that $185,000.
First order of business for the reborn weight loss centre will be to get the Subiaco centre up and running again.
At the time of its being put into administration The Metabolism Centre had 17 centres around Australia.
Ascent Capital director Gary Steinepreis said that was necessary to ensure that Metabolism Health met Australian Stock Exchange listing rules and was not delisted.
He said there would be a very slow and steady approach to building the business.
"We have to raise money to rebuild the business," Mr Steinepreis said.
"At the same time we’ll be continuing the business and looking for other opportunities to build on it.
"We will be looking for complementary businesses."
Mr Steinepreis said Subiaco would be the first store to reopen and would be the only one open during the recapitalisation stage.
"We are also securing important equipment to allow us to open other outlets," he said.
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