Listed investment company Bluenergy Group has been placed in administration, as it struggles to meet the vendor terms of a deal to acquire Bluenergy Asia.
Until March this year the business had been trading as Carbon Polymers Limited and was Australia’s largest tyre-recycling company until late last year.
In December 2013, Bluenergy announced it had entered into a cash and scrip deal to sell its recycling assets to Giacci Global Limited, as it departed from the recycling sector with the acquisition of Bluenergy Asia.
On April 10 the business was placed into administration, with David Sampson and Mitchell Bell appointed as administrators from BPS Recovery.
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Bluenergy Group company secretary Jerry Gordon said in a statement the vendors of the Bluenergy Asia transaction had sought greater certainty regarding the timing and the realisation of the sale of the company’s recycling assets to payout existing liabilities.
“Prior to the completion of that transaction and taking advice, the directors concluded that the best and most efficient way of delivering the vendors changed requirements and protecting the interests of all stakeholders was to place the company into voluntary administration,” Gordon said.
“The board was also mindful that without the certainty of the loan facilities, the committed capital raising approve by the shareholders and the stability of the equity standby facility that were all dependent on the completion of the transaction, the company may not have been able to pay its liabilities as previously advised to creditors.”
SmartCompany contacted the administrators, but had no response.
Bluenergy Group chairman Rodger Johnston told SmartCompany the business would now propose a deed of company arrangement, which it hopes will satisfy the needs of the vendors and stakeholders.
“There will be a meeting of the unsecured creditors on April 23… the directors intend to put forward a deed of company arrangement which will keep the company alive,” he says.
“There will also be an informal meeting held with the secured creditors in the next day or two. We will know more about their attitudes and direction after this meeting… There will also be an arrangement with them as to how we manage the secured assets of the company going forward.”
Johnston says the company has been around for a long time, but under various guises.
“By nature it’s a general investment company. It’s had a variety of investments over the years but about four years ago it decided to focus on recycling and over the past few years acquired a number of recycling businesses,” he says.
“About 12 months ago it reached the agreement to acquire Bluenergy Asia, and this transaction has been in process for the past 12 months.”
In November last year reports emerged the company’s machines were regularly breaking down, it had failed to pay bills and the closure of some of its facilities was allegedly not disclosed to the market.
In a statement to the ASX, Bluenergy Group denied it had failed to inform the market of facility closures.
In the past three years Bluenergy Group has raised $9 million from investors, as it promised a $20 million profit by 2016.