From The West Austrlian:Chemeq goes into administration30th May...

From The West Austrlian:

Chemeq goes into administration

30th May 2007, 11:45 WST


The directors of Chemeq placed the struggling Rockingham animal drugs company into administration this morning after failing to overturn a crucial court ruling that was threatening its survival.

Managing director David Williams finalised the appointment of KordaMentha partner Brian McMaster within minutes of WA’s Court of Appeal handing down its decision, which forces Chemeq to repay $60 million worth of debts.
Mr Williams expressed disappointment with the Court of Appeal ruling and said Chemeq’s fate would now rest with Mr McMaster.

Chemeq has already placed its Rockingham facility on care-and-maintenance.
The company’s shares, once worth $7.98, have fallen to 8.3c and were placed in a trading halt yesterday ahead of today’s court ruling.

Chemeq’s about 7000 shareholders are expected to lose most of their investment.
The appointment of Mr McMaster ends a five-month tussle between Chemeq and bondholders Start Trading and Harmony Capital Partners, which claimed the Rockingham company had breached debt covenants and therefore had to immediately repay the $60 million owed.

Chemeq took its opposition to the bondholders’ demands to the courts, although this morning’s Court of Appeal decision effectively spells the end the Rockingham company’s fight.

Chemeq does not have $60 million, raising the prospect that its much-hyped polymeric anti-microbial drug, which was touted as a far superior, and healthier, growth agent for pork and poultry than the more conventional human antibiotics, would fall into the hands of an overseas biotech company as part of the bondholders’ efforts to recoup their owed monies.

NEALE PRIOR and PETER KLINGER