Big brother Mineral Resources not ruling out | Australian Markets
Mineral Resources is probably interested by choosing up the items of Resource Development Group, the debt-laden garnet developer led by Chris Ellison’s youthful brother Andrew Ellison.
The listed company, known as RDG, declared insolvency and handed itself over to directors at McGrathNicol on Monday after MInRes, as the foremost shareholder, declined so as to add more funding to an current $130 million-plus debt pile.
MinRes — beneath the steer of new board chair Malcolm Bundey, who began simply weeks in the past — instructed the market on Monday it had been “reviewing its arrangements” in place with the debtor and that the board had determined in opposition to offering a money advance.
But a memo directors ready for workers suggests the listed backer gained’t be washing its arms totally of the garnet miner and manganese developer, and “may participate” in a sale or recapitalisation course of.
Mineral Resources did not explicitly remark concerning its potential involvement going ahead, however a spokesman confirmed the governance preparations put in place to review RDG’s money owed would proceed.
The review had been led by Mr Bundey, who changed James McClements at the beginning of July, and a “small group of MinRes non-executive directors and executives”.
Directors additionally on the RDG board and Chris Ellison have been excluded from the method and would stay so in coping with directors going ahead, the spokesman mentioned.
“As RDG’s majority shareholder and secured creditor, this group will continue to manage MinRes’ engagement with the administrators going forward,” he mentioned.
“The MinRes nominees on the RDG board were excluded from this process, as was MinRes managing director Chris Ellison.”
MinRes’ chief financial officer Mark Wilson is chair of RDG, and mining companies boss Mike Grey is a non-executive director, in response to its web site.
Administrators mentioned they might search expressions of curiosity for the sale of recapitalisation of some or all of the business and its property.
“Mineral Resources has indicated it may participate in this process. We will provide further updates as the sales process progresses,” the memo mentioned.
MinRes additionally “indicated” it might guarantee all staff’ pre-appointment entitlements are paid out, in response to the administrator’s round, as it’s unsure whether or not there may be enough within the kitty to pay entitlements owed.
“MRL has indicated it will provide funding to ensure all employees’ pre-appointment claims will be paid.”
MinRes is RDG’s main shareholder with 64.3 per cent of the business and a secured creditor.
It initially lent $35m to RDG back in 2020 to help develop a batch of manganese property it bought in exchange for a 75 per cent stake within the junior, which then later acquired the Lucky Bay garnet project in January 2021.
MinRes founder Chris Ellison recused himself from any discussions concerning RDG or that transaction, in response to an ASX disclosure on the time.
Lucky Bay began producing in 2023 however has since been unable to hit industrial manufacturing, making $15.6m in gross sales made within the six months to December 2024.
According to its most up-to-date financial accounts, RDG by the top of 2024 had drawn down $130.7m of a $135m loan supplied by MinRes, and had simply $5.9m left within the bank.
Stay up to date with the latest news within the Australian markets! Our web site is your go-to source for cutting-edge financial news, market trends, financial insights, and updates on native trade. We present every day updates to make sure you have entry to the freshest data on Australian stock actions, commodity costs, currency fluctuations, and key financial developments.
Explore how these trends are shaping the longer term of Australia’s financial system! Visit us frequently for essentially the most partaking and informative market content material by clicking right here. Our fastidiously curated articles will keep you knowledgeable on market shifts, investment methods, regulatory adjustments, and pivotal moments within the Australian financial panorama.
