ifac deal, page-15

Many readers of HC would not see the following piece, here quoted in full.

The West Australian Sat 8.12.07
"Herd on the Terrace" Ed. Neale Prior
Chemeq investors eye bypass.

Share punters caught up in the collapse of failed veterindrug outfit Chemeq will be well advised not to start cutting up their scrip for Christmas decorations just yet.

While a report to creditors by adminisrators at KordaMentha paints a pretty sad picture of a company jumping about 10 steps ahead of itself in trying to commercialise its technology, skilled readers of tea leaves are telling us this could be anything but a standard corporate demolition job.

The KordaMentha rport reveals that receivers from Ferrier Hodgson are working on a potential restructure of the group that could leave a restructured Chemeq corporate shell retaining ownership of its much-hyped alternative to animal antibiotics.

If successful, this strategy will doubtless result in the overseas bondholders that appointed Ferrier Hodgson earlier this year being paid out first - and probably a bit extra than their origianl $60 million for all their trouble and strife.

A restructure that goes really well could ultimately produce some returns for unsecured creditors and, maybe, even shareholders.

This is where it gets interesting because, going by the KordaMentha report, at least some lucky shareholders might even have the opportunity to move up the pecking order and become unsecured creditors.

The report reveals administrator Brian McMaster is investigating the quality of the company's sharemarket disclosure about its issues with the bondholders between July and October last year and about what appeared to be massive problems getting crucial Austrlalian approval for its drug.

Thanks to a landmark High Court ruling this year with Sons of Gwalia, creditors who bought shares in a misinformed market can make claims as unsecured creditors.

A couple of Christmases could elapse before the saga fully plays out, but it likely to be veery interesting.