I guess we are a little despondent given all the work we have done to get this far and we still do not have a solution. My estimate is that a small team of 4 have invested a great deal of time searching company releases andmaterial that is in the public domain (at least 4000 hours). We have all that informationand we have made it available to various law firms who want large payments to repeat searches already done. Some that I am in contact with suggest that there is a strong case to support shareholder claims that they should be viewed as creditors and rank equally with other creditors.
My dilemma centres on the actions of the administrator and my estimate to date is that the administration has cost in the order of $3 million with no outcome. We have reached a stalemate. I am e not willing to accept any creditor led proposals that result in the dilution of non associated shareholders down to 5 percent and it was made abundantly clear at the EGM. And yet the Administrator and the major creditor have proposed the same thing back. One must ask - what land are they living in?
The administrators sitting back and just collecting their fees without brokering a deal between the affected parties (shareholders and creditors) is in my view unprofessional and worthy of serious investigation by ASIC.
Ay the EGM I was surprisedby statements from the administrator suggesting the company is a very marginal business proposition.This is really what needs serious investigation. And I suspect that the administration process has not revealed the real potential of the company in that the true value of the Sulphide deposit which is the crux of the of the future business proposition. Without that information a resolution to the current stalemate cannot be found. We are told that we are unable there is only one technology to extract the metals from the Sulphides and that is subject to copyright and very expensive. In a world where we can extract hydrogen from water (one of the most stable compounds on earth how can it me we cant break up sulphides into its constituent parts economically?
I feel that reports relating to the Sulphide deposit have been commissioned by Ferrier Hodgson (Administrator) Ernst and Young (Receiver Manager) HNC (Joint Venture Partner) and the two major creditors (YA Global and Coffee House). Only limited information is available and obviously a great deal of commercially sensitive information exists. The question is how much in any is known to the administrators?
It is my view that the administrator is not acting in the best interests of creditors by nor brokering a deal with shareholders. I for one will never be agreeing to a proposition that results in massive dilution of non associated shareholder equity and I will do my best to ensure that shareholders that I know will not either so therein lies the problem for the administrator.
The message to Ferrier Hodgson is broker a deal or face the the real prospect of failing to honour their commitment to their creditors.
CMR Price at posting:
15.0¢ Sentiment: Hold Disclosure: Held
