Nexus Energy’s administrators say they are urgently assessing the company’s finances but intend to ensure its oil and gas projects continue operating.
The embattled company went into voluntary administration on Thursday when shareholders rejected billionaire Kerry Stokes’ Seven Group’s takeover bid.
Nearly 58 per cent of shareholders voted against Mr Stokes’ two cents per share cash offer, well above the 25 per cent need to scuttle the deal.
It was a mass snub from angry shareholders towards a board that had unanimously recommended the deal.
Nexus’ shares were 5.9 cents when the $26.6 million bid lobbed on March 31.
Shareholders have risked receiving nothing now that the company is in the hands of administrators, which puts creditors rather than shareholders front and centre, with Seven also Nexus’ biggest creditor.
The administrators, McGrathNicol, said its immediate priority was to take control of Nexus’ assets and urgently assess its financial position.
“The administrators will be working with all key stakeholders, including employees and regulatory agencies to ensure the trading operations continue,” said Tony McGrath, one of the firm’s three partners.
A company in administration has not collapsed or is not bankrupt, but is considered in financial difficulty and insolvent.
Nexus chief executive Lucio Della Martina told shareholders that $400 million was needed to get out of trouble and avoid administration, which included funding commitments to its Victorian and Western Australian gas assets and litigation.
Seven would have met those costs if the takeover had occurred but what happens now is unknown, as it tries to recover money lent to Nexus and acquire its assets.
Mr McGrath said administrators were working with Nexus and Seven to assess recapitalisation, restructuring and sale opportunities ahead of a creditors meeting on June 24.
Despite its position of strength as creditor, Seven still risks missing out on buying Nexus’s prized offshore Crux field in WA, because partners Shell and Osaka Gas have pre-emptive rights.
Seven, which wants to add a third energy sector arm to its media and industrial services businesses, released a statement on Friday, saying it was disappointed on behalf of shareholders who supported the acquisition.
The Nexus board released a joint statement saying “it was extremely disappointed that despite running a comprehensive process we were not able to secure a more favourable outcome for shareholders”.
Nexus shares have been suspended from trading at 1.3 cents, with the company’s market value shrinking to $17 million.
Nexus was worth more than $1 billion six years ago.