Metal Storm funding crisis: tests solvency each day * CITY BEAT:...

Metal Storm funding crisis: tests solvency each day

* CITY BEAT: Michael Bennet
* From: The Australian
* December 03, 2009 10:44AM



WE hate to harp on about it, but it's happened, again -- Metal Storm's $2.1m in rescue funding has again failed to come through, pushing the company to the brink of insolvency.

The Brisbane-based weapons maker said this morning it has again given the first tranche of Assure Fast Holdings' $US35m funding due 7pm Brisbane time last night (8pm AEDT) another 24 hours and that it was now “testing the issue of solvency each day".

"The company has reduced its day to day expenditure to remain solvent for as long as possible to allow as much time as possible for this funding to be received," Metal Storm said in a statement.

"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."

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The $2.1m first tranche was originally due on November 3 after it eked the deal with the little-known Assure on October 22.

Metal Storm has blamed a cyclone and bank holiday in Manila, Philippines -- where Assure chairman Robert Rivero is based -- for the delays and sent staff to Hong Kong to help Assure’s bank the Royal Bank of Scotland with the deal.

Metal Storm today used the exact same line as yesterday to explain the most recent delay, only adding that it was "active" in the process.

"The clearing banks are processing first tranche funds for remission in accordance with their own timetables. Neither AFHL nor Metal Storm has been able to directly influence that process timing. The company continues to be as active as it can be in the process," the weapons maker said.

Metal Storm in July said it had enough cash to last until the end of October and recently told City Beat it is monitoring its cash position every day.