takeover - why so many lies last week?, page-9

Forge Group looks at restructuring.

http://www.thebull.com.au/articles/a/44029-forge-group-looks-at-restructuring.html


By AAP | 12.02.2014 03:50 PM

Forge Group directors are looking at restructuring the mining services company after financiers withdrew their support.

The company has been placed into voluntary administration, with the board appointing Ferrier Hodgson partners Martin Jones, Andrew Saker and Ben Johnson as administrators.

"Forge Group directors are working with the administrators with respect to the group's financial position and are considering options for the restructure of the group," the administrators said in a statement.

Forge Group, which is understood to hold debt with the ANZ Bank, has been on the market since last month as it struggled with the construction of power stations in Western Australia.

Talk of a restructure has also cast a cloud over the construction of a $1.47 billion processing facility at Gina Rinehart's Roy Hill iron ore project in WA, which is worth $830 million to Forge.

Forge's financiers have appointed Mark Mentha and Scott Langdon of KordaMentha as receivers and managers.

Forge shares were placed in a trading halt on Tuesday ahead of an expected announcement to the market on Thursday.

The decision to appoint administrators comes less than a fortnight after Forge said it expected to post a full year loss of up to $25 million.

In December, Forge announced writedowns of $127 million associated with its Diamantina Power Station and West Angelas Power Station projects.

This led to an 84 per cent dive in Forge's shares in one day and since November its stock has fallen 78 per cent on bad financial news.

Forge also scared investors in mid-January with a writedown of up to $28 million on the West Angelas project, sparking another share price plunge.

The company's shares last traded at 91.5 cents.

The first meeting of creditors is scheduled to take place in Perth on February 21.