Assure Fast delays lash Metal Storm, O'Dwyer keeps shooting *...

Assure Fast delays lash Metal Storm, O'Dwyer keeps shooting

* CITY BEAT: Michael Bennet
* From: The Australian
* December 10, 2009 3:41PM



IF Metal Storm is "annoyed" at the 11th delay today of the first tranche of a $US35 million rescue package from Assure Fast Holdings, it must be fuming at the further damage wreaked on an already ravaged share price.

Shares of the embattled weapons maker have more than halved to a low today of 2.3 cents since the deal with AFHL was announced about a month and a half ago on October 22.

Back then, news of the rescue buoyed investors, who sent Metal Storm shares up 66 per cent to 5c on the day of the announcement, with almost 100 million shares swapping hands.

But since then, Metal Storm investors have watched in horror as cyclones, bank holidays and complete unknowns have delayed despatch of the troubled $2.1m first tranche, which the company now expects to hit its bank today.

Weary shareholders didn’t buy it, sending the stock down almost 12 per cent.




“The board is conscious of the delays and annoyed by them,” Metal Storm said.

Chairman Terry O’Dwyer yesterday refused to explain the delays when contacted by The Australian, but promised to reveal all when the deal is done, whichever way the saga ends.

Mr O’Dwyer also revealed his severely strained relationship with company founder and cousin Mike O’Dwyer, who has been selling down his stake in the company.

“Mike and I some years ago went our separate ways and I have no communication with Michael in the last 12 months and I certainly don’t communicate with him, so he’s an arms-length shareholder as far as I’m concerned. He does what he chooses to,” he said.

But in some good news for shareholders, Metal Storm today advised it’s got some breathing space after receiving $300,000 from its additional “immediate equity placement” to AFHL arranged this week.

The Brisbane company is expecting a further $430,000 by tomorrow, which will give AFHL an additional 45 million shares in Metal Storm at a tidy discount of 1.6c.

Mr O’Dwyer yesterday said the company’s bank account was almost bare this week.

“The immediate potential of insolvency is substantially reduced but not eliminated entirely. However, it is unlikely the company will need to appoint an administrator in the short term,” the company said.

Metal Storm also reiterated it is ploughing along with its $25m placement to a new offshore investor, just in case all AFHL’s delays become one big permanent cancellation.