No announcement from the company? Maybe they have all been escorted from the building and the locks changed!
Chemeq loses case, goes into administration
30-May-07 by Andrew Hobbs
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Chemeq loses case, goes into administration - 30 May, 11:43am
Embattled animal pharmaceutical products manufacturer Chemeq Ltd is understood to have been placed in administration, after losing an appeal against a previous decision to repay $60 million to creditors.
Korda Mentha's Brian McMaster is understood to have been appointed as administrator by the company's board.
The company, which placed its Rockingham facility on care-and-maintenance earlier this year, had its entire production and maintenance staff walk out earlier this month, with maintenance covered by external contractors"on an as required basis".
Chemeq was unable to hire new staff under its undertakings with the bond holders.
The company's legal woes were caused by US bonds trader Stark Trading and Harmony Capital Partners, which had issued convertible bonds to the company worth $50 million and $10 million respectively.
One condition of the contract was that Chemeq achieve total gross revenue of at least $4 million for the year ended 30 June 2006.
The company's income statement for the 2005-06 financial year shows a revenue of $4.1 million, however the company's independent audit report identified uncertainty about the validity of a $1.5 million contract with Chemeq's South African distributor Inviro.
Inviro refused to pay the company, saying the terms of a sales agreement between the two had been altered. While Chemeq was pursuing legal action against Inviro, it argued in the Supreme Court it could book the $1.5 million as revenue since product delivery was made and accepted by Inviro at the time.
Stark and Harmony disagreed, seeking immediate repayment of the bonds on the grounds Chemeq had violated its revenue covenant.
Chemeq shares closed at 8.3 cents yesterday before going into a trading halt ahead of today's announcement.
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