another annoucement from mst, page-24

Last hope for Metal Storm's rescue

* Rebecca Urban
* From: The Australian
* December 07, 2009 12:00AM

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INVESTORS in the troubled weapons maker Metal Storm are anxiously waiting to learn whether a rescue funding package, which is more than a month overdue, was delivered at the weekend.

The Australian Securities Exchange-listed company, which was down to its last $500,000 at the end of September, told investors on Friday that a glitch with the paperwork required to transfer the funds from its mysterious British Virgin Islands-based saviour would be resolved that day.

The first tranche of a $US35 million ($38m) investment by Assure Fast Holdings was due on November 3. Metal Storm has had no shortage of excuses for the delay, ranging from a cyclone to a bank holiday in The Philippines, where the investor's chairman, Robert Rivero, is believed to be based.

Fears that the company will become insolvent before the funds arrive have battered its share price. The stock, which once traded above $3, closed at 2.4c on Friday.

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Related Coverage

* Metal down to $50,000 Courier Mail, 7 hours ago
* Metal Storm still waiting The Australian, 2 days ago
* Stocks lower as miners slump Perth Now, 2 days ago
* No sign of Metal Storm funds The Australian, 3 days ago
* Metal Storm tests solvency The Australian, 3 days ago

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Metal Storm chief executive Lee Finniear could not be contacted yesterday. However, in a statement to the ASX on Friday, the company advised that it had sought a detailed explanation as to why the transfer of funds had been "unreasonably delayed".

"Late in the day (Assure Fast Holding) advised the company that it had been made aware that there is a defect in a bank transmission document for the receiving bank," the statement said.

"(Assure) will seek to have that document reissued by the originating bank and expects that to occur today. Metal Storm continues to be as active as it can be in the process."

In the meantime, the company has been forced to reduce its daily expenditure in a bid to remain solvent. "The board is testing the issue of solvency each day and will need to appoint an administrator as soon as that test cannot be satisfied," it said.

Recent filings to the ASX reveal that the inventor of Metal Storm's electronically fired ammunitions system, which has not yet been successfully commercialised, has been reducing his shareholding in the company.

Former director Mike O'Dwyer cut his stake from 17 to 15 per cent in November.