US ACQUISITION FIRES UP METAL STORM
Written on the 25 November 2011
A New York-based investment fund manager has invested millions of dollars in a Brisbane-based weapons company.
Advised by HopgoodGanim partner Michael Hansel, US-based Lind Partners acquired $13 million of secured convertible notes in ASX-listed Metal Storm.
The purchase allows Lind's Australian Special Opportunity Fund to assist with reorganising a broader capital restructure as holder of the notes.
“The Lind Partners invests across a broad range of industries and economic environments - and is looking at a number of strategic equity opportunities in Australia,” says Hansel.
Corrs Chambers Westgarth partner Stephanie Daveson advised Metal Storm on the deal and separately establishing a $900,000 convertible security with Lind.
“The transaction involved a significant cross border restructure of Metal Storm’s capital structure under very tight timelines – and will ultimately require three meetings: Two for shareholders and one for note-holders,” says Daveson.
“We have advised Metal Storm over many years. (We acted on) rights issues in 2006, 2010 and 2011 – and a complex restructure of existing convertible notes, which helped to significantly reduce the company’s ongoing interest payments.”
The agreement sees Lind invest a further $1 million in Metal Storm across several tranches in exchange for newly issued, unsecured convertible notes.
The notes can be converted to ordinary shares at daily volume average prices, but will not be listed on the ASX.
Lind managing director Jeff Easton says the deal might help the target shed some of its debt and recapitalise for further technology developments.
Metal Storm has developed lightweight, compact and non-mechanical firearms using computer-controlled electronic ignition with stacked projectiles. They have multiple barrels mounted together, allowing a range of munitions types to be deployed in a single, light-weight weapon system.
The investment’s final $200,000 tranche is subject to investor approval.