Onterran Limited (ASX: OTR) announced about its appointment of David Clout and Patricia Talty as Voluntary Administrators of the company on date March 8, 2019.
The administrators are currently assessing OTR’s business and will work with the stakeholders to determine the appropriate strategy for the business. The administrators understand the Directors intend to put forward a Deed of company arrangement proposal and will report to creditors in relation to any such proposal received in due course.
As per the announcement, the first meeting of creditors will be held according to section 436E of the Corporations Act 2001 within eight business days after the appointment of the administrators. It is currently expected that the meeting will be held on March 20, 2019. A notice setting out the time and location of the meeting will be distributed to Onterran’s creditors in the coming days.
The company intends to enter a restructuring process through offering and seeking the approval of a Deed of Company Arrangement.
In a previous announcement, the company issued new securities of 8,000,000 of fully paid ordinary shares at $0.005 per share for the purpose of fulfil the working capital requirement. In another update, the company announced about the sale of its stock in Island Resort Private Limited which is a holder of certain assets such as development land, management rights including associated real estate properties and the operating business of the Couran Cove Island Resort through its subsidiaries, however, Onterran will remain owner of 80 apartments.
The sale of Island Resort shares has been seen as the best opportunity by the company to protect and enhance the remaining value for all classes of its shareholders. The decision is being in perspective to Couran Cove Island Resort needing an owner with a stronger capital base than Onterran. Capital in the order of $7 Mn to $10 Mn is estimated to be required to be able to make the asset truly successful. The Board of Directors at OTR stated that in current circumstances this capital could not be raised on a timely or commercial basis or in a manner that would enhance the return for Onterran classes of shareholder.
EDG Capital has a clear vision for its new interest and plans to invest as per the capital requirements to make the transition a success. It is an existing secured creditor with total consideration being around $17 Mn. This sale would be a subject to regulatory approvals along with the application to the ASX under listing rule 11.2 to identify the shareholder approval requirements. Both the groups are working to complete the outstanding audits and expects the procedure to finish by June 30, 2019. Until then the control of Couran Cove Island Resort will pass on to the buyer, but rights and title will not pass till all the requite conditions are met.
The stock of the company remains suspended on the Australian Securities Exchange or ASX. OTR’s shares last traded at the price of $0.315 as on February 09, 2017 with the market capitalization of circa $19.96 Mn.
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