Perth waste company collapses

ASX company M8 Sustainable has been placed into voluntary administration after being overwhelmed by growing debts and lack of cash flow into the business.

The trigger for the administration was its inability to service an $11 million loan with Remagen Capital Management.

Three McGrathNicol Restructuring partners - Sydney-based Jonathan Henry and Perth-based Rob Kirman and Rob Brauer - have been appointed voluntary administrators.

The company had been striving to complete construction of a landfill facility in Gingin, which to date has cost about $14.8 million (including capitalised interest).

This would have allowed it to reopen and ramp up its other operations, notably a waste treatment facility in Maddington.

The Gingin project was meant to be funded from the proceeds of its $19 million IPO, which was completed in December 2019.

However, the IPO proceeds were exhausted by March 2021 and since then the company has taken on more debt to fund both the Gingin project and its other operations.

This included issuing convertible notes to Remagen, to Reforme Special Situation Pty Ltd and to its major shareholder, Thailand-based company M8 Holdings (formerly SBANG).

M8 Holdings nominee Saithsiri Saksitthisereekul was appointed chairman of M8 in December.

It also completed a share placement to Adroit Capital Group.

In December, both M8 Holdings and Adroit issued 249D notices calling for a general meeting to make changes to the board.   

The company had just $114,000 in cash at the end of December.

M8 was led by managing director Tom Rudas, who brought extensive experience in waste management to the role.

Its board was originally chaired by Bob McKinnon, who had previously been a director of successful waste company Toxfree Solutions.

The administrators said they are undertaking an urgent examination of the company’s business operations and assets.

A meeting of creditors is expected to take place on February 23.