An ASX-listed company focused on getting a major steel project up and running has buckled into administration, following a string of collapses within the steel industry.
In April, another Melbourne manufacturer of steel products, Rebar Prefab, went into administration, while in May, a Melbourne-based steel business turning over more than $40 million a year faced the same fate.
Boulder Steel was placed in administration last week, with Trevor Pogroske and Said Jahani of Grant Thornton appointed. The company was suspended on the ASX, last trading at just 1.6 cents.
Earlier this month the company had a market cap of $12.7 million at 2.3 cents.
Jahani told SmartCompany this morning the administrators are in the process of selling the company, with some interest already received.
“This was a project in its very early stages,” he says. “They were focused on getting environmental approvals in place, and they had gone a long way down the track in achieving that.
“But they have run out of money.”
The company was focused on its Gladstone Steel Plant Project, but had run into several funding problems. Earlier this month, the company produced a presentation arguing the project would be “well worth the investment”, despite the higher than usual capital investment required.
However, it also stated this higher expenditure was a risk, factoring in a longer lead time and the “higher probability of costs increasing”.
In April, the company wrote to shareholders saying it had limited funds, but was confident of sourcing new finance.
However, earlier this month it said that despite an ongoing purchase plan, “the board is cognisant of the company’s cash position”.
“In addition, the Company is actively pursuing other sources of equity capital.”
While Boulder Steel wasn’t fully operational, and Jahani says the company hasn’t been subject to some of the harsher conditions in the steel industry, there is a trend of steel companies falling under hard times.
Earlier this month, a Melbourne-based steel business which had been operating for 130 years collapsed into administration and is set to be liquidated.
“Principally, this is a reflection of manufacturing and what’s happening in this industry,” the company’s former general manager told SmartCompany at the time.
For now, Jahani says any interested parties should contact Grant Thornton regarding Boulder Steel.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
