Metal Storm has taken a step back into corporate life From,...

Metal Storm has taken a step back into corporate life

From, couriermail.com.au

November 07, 2012

CRUMPLED weapons developer Metal Storm has taken a step back into corporate life - albeit with Australian operations shut down.

Creditors in Brisbane-based Metal Storm, which was developing a mini-shotgun and three-shot grenade launcher among devices, have backed a deed to restructure debt after the company ran out of cash in July.

The deed is still subject to conditions such as getting Australian Securities Exchange approval to lift a suspension on Metal Storm shares.

If it proceeds, shareholders will have holdings heavily diluted and the Australian Special Opportunity Fund, run by New York-based fund managers The Lind Partners, will snare up to 95 per cent of Metal Storm stock. ASOF was the largest secured creditor as it held the lion's share of almost $13 million in convertible notes in Metal Storm.

The deed would see ASOF inject $1 million into the weapons developer, which already has losses of $115 million.

Noteholders would have their notes turned into shares.

Employees would be paid out while unsecured creditors owed $6.6 million are tipped to get at most an estimated 1.13c in the dollar.

The board of Metal Storm, which listed in 1999, in July appointed Adam Shepard and Adam Farnsworth of Dean-Willcocks Shepard as administrators.

The administrators ran a sales process. Tentative offers came through, but "nothing of any substance" that would have been in the interests of creditors, Mr Shepard told The Courier-Mail1.

Some tentative indications came from the US, he said.

A creditors' report showed one offer was for as little as $100,000.

The deal raises the possibility Lind may some time look to offload or win a deal for Metal Storm.

The administrators have sold furniture and shut Metal Storm's facility in Darra on Brisbane's westside, and employees have departed including former chief executive Lee Finniear.

A corporate office with several staff remained in Australia, as did the company's patents, Mr Shepard said.

US operations, with four staff, is continuing along with work on a contract with Colt.


From:

http://www.couriermail.com.au/business/metal-storm-looks-to-lock-and-load-new-debt-restructure/story-fnefl294-1226511776060