Junior sulfate of potash (SOP) company Salt Lake Potash Ltd. (SO4), Perth, on Oct. 20 disclosed that the company is insolvent, or likely to become so in the future. Directors appointed KPMG Restructuring as Voluntary Administrators; however, soon after creditors appointed KordaMentha Restructuring, the distressed business division of KordaMentha, an advisory and investment firm, to take over.
KordaMentha is now in control of the group’s assets and is conducting an assessment of the company’s financial position as operations continue as usual. They will begin a process to recapitalize the company or market its assets for sale.
SO4’s Lake Way Project in Western Australia was slated to begin sulfate of potash (SOP) production in June. However, in late July, the company revised its ramp up schedule and said it would need more money to proceed (GM July 30, p. 1). SO4 also in late July halted trading on the Australian Stock Exchange (ASX) pending further announcements. It was halted on London’s Alternative Investment Market (AIM) on Oct. 19.
According to Australia’s Financial Review, Lake Way had disappointing geological and processing results and investors did not come forward to fill the latest gap, after having been tapped 11 times for a total of $507 million of debt and equity over the past five years. Creditors are now reportedly owed A$170 million (US$127 million). Australia’s Clean Energy Finance Corp. is reportedly owed US$47 million.
Former CEO Tony Swiericzuk resigned in late August (GM Aug. 27, p. 27), about one month after SO4 announced that it had revised its schedule. Isak Buitendag was appointed CEO in September (GM Sept. 17, p. 27), however, that was subject to requotation of the company’s securities on the ASX.