Metabolism directors gain

METABOLISM Health Limited directors Jim Cowling, Joseph Ohayon and David John look set to participate in the listed company’s next incarnation, despite the rapid collapse of its diet centre business, which left 200 unsecured creditors up to $7 million out of pocket.

Ascent Capital has struck a deed of company arrangement to end the administration of MHL, in which the directors hold less than 5 per cent – although the combined holding looks to be worth little more than $25,000 under a deal being considered.

MHL subsidiary The Metabolism Centre has gone into liquidation, owing between $6 million and $7 million.

According to Australian Stock Exchange records Mr Cowling holds about 2.4 per cent of the 55 million MHL shares on issue. Mr Ohayon holds about 1.1 per cent and Mr John’s wife, Erica John, holds 1.2 per cent.

At the initial public offer price of 20 cents a share those holdings would have been worth $269,525.20, $122,209.20 and $133,333.40 respectively.

At the nominal 1-cent-a-share price for MHL shares being suggested, those holdings would still be worth $13,476.26, $6,110 and $6,666.67 respectively.

In contrast, at least one creditor from the failed weight loss centre businesses is owed more than $700,000.

Those share holdings will be consolidated in a two-for-one share deal being offered by Ascent and then further diluted when the MHL business is recapitalised. Original MHL shareholders will not be allowed to take part in some of the capital raisings.

The directors also face the possibility of insolvent trading claims from TMC administrator Mark Reilly.

Mr Reilly said he was still weighing up whether the benefits of pursuing such an action would outweigh the legal costs.

“I believe there is a strong claim for a case of insolvent trading,” he said.


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