Storm's metal fatigue despite its $2m-plus raising
July 08, 2009
THE future of defence technology company Metal Storm remains uncertain, despite the company raising more than $2 million from shareholders.
On July 31, the company will formally seek noteholder and shareholder approval to extend the maturity of almost $20m in convertible notes, currently due to mature on September 1.
The $2.6m that Metal Storm has raised in a share purchase plan that closed on Friday will be used to tide the company over while the documentation to any extension is finalised and the company seeks more capital.
If Metal Storm fails to secure the note extension, however, the company will repay the $2,613,400 it raised in the share purchase plan, and the company faces the prospect that the noteholders could put it into administration.
Metal Storm reported the results of the share purchase plan to the Australian stock exchange in a statement on Monday. Under the plan, shareholders could apply for shares to the value of between $1000 and $10,000, at a price 80 per cent of the volume-weighted average over the five business days immediately before the date shares are issued.
Metal Storm shares closed unchanged at 3c.
Metal Storm was last week awarded a development project worth $US514,700 ($647,000) with the US Army to increase the battle effectiveness of certain warheads.
http://www.theaustralian.news.com.au/business/story/0,28124,25748249-36418,00.html
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