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Mirabela shareholders cry foul over recap plan

A GROUP of shareholders of collapsed Mirabela Nickel have requested an investigation by the Austr...

Kristie Batten

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Last week, Mirabela’s board appointed Martin Madden, Clifford Rocke and David Winterbottom of KordaMentha as joint and several administrators.
 
At the same time, Mirabela unveiled a recapitalisation plan which that see its note-holders take a 54.4% stake in the company, with existing shareholders to receive nothing.
 
In a letter to ASIC, Dan Larkham on behalf of the MBN Class Action Group said the existing share value amounted to 0.01% of the restructured company, which neglected Mirabela’s duty to shareholders.
 
“This amounts to an ambush of their shareholders with total disregard to their rights,” the letter said.
 
“Further, it is our opinion that some shareholders may have received a priority allotment of shares in the new reorganised Mirabela, thereby materially prejudicing other shareholders.
 
“There has been no disclosure of who the new shareholders are by Mirabela Nickel. In fact, they have deliberately blacked out all the names on their recent announcement.
 
“We believe it is our right to know if any directors or existing shareholders have been given an unfair advantage over other shareholders.”
 
As well as the recapitalisation, the group is seeking an investigation into the conduct of Mirabela in the lead-up to and during its suspension from the Australian Securities Exchange, which began in October 2013.
 
In the letter, Larkham said Mirabela had claimed to have $US80 million cash at August 31 and if it was insolvent or likely to become insolvent, it didn’t tell shareholders.
 
“Their announcement a week or so before suspension could be described as upbeat, certainly not suggesting likely insolvency,” the letter said.
 
“One of the 50% offtake customers, Votorantim, ended their commitment early to Mirabela Nickel in September 2013 and Mirabela Nickel may have decided it was easier to do a deal with creditors to hand over all the shareholders equity, but this was neglecting their shareholder responsibilities.”
 
The group also claims that Mirabela gave no reason for the suspension of its shares.
 
ASIC said its policy was not to discuss operational matters, including if it had received a complaint or if it was investigating a company.
 
Mirabela said last week it had considered the sale of a stake to another company, but the recapitalisation was the best option.
 
The Santa Rita nickel mine in Brazil will continue to operate through the administration, with mining of waste and ore reduced to 25 million tonnes per annum for this year and next.
 
Mirabela has cash on hand and on deposit of $31.9 million, as well as 4976 dry metric tonnes of nickel concentrate.
 
The company has a short-term contract for the sale of 50% of nickel concentrate production, or an estimated 16,500t, which expires next month.
 
Shares in Mirabela, which have been suspended since October, will remain suspended through the administration period.
 
Administrators will hold the first meeting of creditors next Monday.

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