Weapons developer Metal Storm is up for sale after a complex financing deal fell through, forcing it into voluntary administration.
The company on Thursday appointed Dean-Willcocks Shepard Recovery & Strategy as administrators, saying it was hoped the business could be restructured or sold as a going concern.
The future of the company’s 10 Brisbane-based workers was unclear.
“The administrators are now in control of Metal Storm and will work with all stakeholders including employees, the noteholders, other creditors and shareholders in an attempt to restructure the company or sell it as going concern,” the company said in a statement.
Administrator Adam Shepard said two Australian companies had already expressed interest in buying Metal Storm, which collapsed with debts of between $15 and $18 million.
He said it was possible that foreign companies could also be interest once news spreads about Metal Storm’s collapse.
“Hopefully something should happen in the next four weeks,” Mr Shepard told AAP.
Metal Storm’s collapse comes after it entered into an umbrella deed with Australian Special Opportunity Fund (ASOF) and Luxinvest Capital Advisors, and a related subscription agreement with Luxinvest in April.
The aim of the deals was to eliminate $11.9 million worth of Metal Storm’s secured debt and provide $2.95 million in working capital.
However, Luxinvest was unable to complete the agreement as required on July 18.
As a result, ASOF terminated the umbrella deed the following day.
Metal Storm, which develops grenade launchers and other weapons systems, flagged in June that it would need to find alternative funding if the deed was terminated.
It also warned that if it did believe it would be successful in obtaining an additional source of funding, its board may have to appoint an administrator.
“Since the termination of the umbrella deed, Metal Storm has been attempting to obtain additional funding to allow the company to continue operating,” the company said.
“However, after considering all of the available options for Metal Storm and after carefully reviewing the company’s financial position, the board has determined that the appointment of the administrators is necessary and in the best interests of Metal Storm’s creditors and shareholders.”
As well as its base in Queensland, the company has a small office in the US city of Arlington.
It has worked with government agencies and departments to develop weapons using its non-mechanical, electronically fire-stacked ammunition system.
Shares in Metal Storm have not traded since the company requested they be suspended from trading on July 20.
They last closed at 0.1 of a cent.
