ASX-LISTED Metal Storm (MST) has entered voluntary administration with debts exceeding $11.9 million.
The decision came less than a fortnight after the Darra firearm-maker secured an equivalent $1.43 million engineering-services contract with military-defence contractor Colt Canada.
Adam Shepard and Adam Farnsworth, of Dean-Willcocks Shepard Recovery and Strategy (DWSRS), have been appointed as administrators.
MST had negotiated an inter-conditional umbrella deed with Australian Special Opportunity Fund (ASOF) and Luxinvest Capital Advisors (LCA) that was hoped to eliminate debt and provide $2.95 million in working capital.
However, ASOF cancelled the deed claiming LCA did not fulfil its end of a related subscription agreement.
In the absence of the deed and an alternative suitor, MST expressed doubt over its chances of finding the necessary sources of funding to continue operating. However, the company reveals DWSRS is looking to reach a positive outcome.
“The administrators are now in control of MST and will work with all stakeholders including employees, note holders, other creditors and shareholders in an attempt to restructure the company or sell it as going concern,” says the company in a written statement.
MST shares last traded at 0.1 cents per unit.
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