report in the australian, page-14

.Metal Storm concedes AFHL rescue likely over CITY BEAT: Michael Bennet From: The Australian December 16, 2009 10:57AM

METAL Storm has finally conceded the delayed $US35 million ($38.6m) rescue package from the mysterious Assure Fast Holdings has likely fallen through, as it moves to lock in its alternate $25m equity placement.
The weapons maker this morning said that it considered "a successful completion of the subscription agreement by AFHL to be unlikely" after last Friday demanding settlement of the much-delayed $2.1m first tranche.

Metal Storm said it would now pursue the previously announced $25m placement, thought be with another offshore party.

The Brisbane-based company today also said it had signed off on a $500,000 equity placement with a private investor, with $200,000 to be closed out by Friday before the remainder on or before January 5.

It is unclear if this is the same investor as a $730,000 placement announced on December 9. Metal Storm received $300,000 of this but the outcome of the remaining balance remains unclear.

Metal Storm did not return calls.

Chairman Terry O'Dwyer previously told City Beat the alternate $25m rescue package was not to major shareholder Harmony Capital as reported.

The saga with AFHL and its chairman Robert Rivero began on October 22 when AFHL pledged to put the $US35m into Metal Storm in a mixture of equity and debt.

The deal would have given AFHL more than 50 per cent Metal Storm, but the equity component never got beyond the first tranche which was hampered by cyclones and bank holidays in Mr Rivero's home base of Manila, despite the deal being done in Hong Kong.

Little has been heard of the $US17.5m debt component since October.

Royal Bank of Scotland was originally working on the deal, but Mr O'Dwyer recently revealed to City Beat that the bankers had changed, leaving shareholders to ponder whose handling their fate.

Metal Storm founder and Mr O'Dwyer's cousin Mike has been selling down his stake in the company as its share price -- which once reached $4 -- has been hammered.

Mike O'Dwyer last held 12.44 per cent as Metal Storms shares today languished at 2.2 cents.