SA Phosphate miner Centrex goes bust
South Australian miner Centrex which has phosphate interests in Queensland today appointed voluntary administrators, having been suspended from trading since mid-December.
Centrex Limited today appointed John Park and Joanne Dunn of FTI Consulting as administrators of the company and its fertiliser subsidiary AgriFlex.
In a short statement, the phosphate mining firm helmed by managing director Robert Mencel said FTI was “continuing to operate the businesses of Centrex and Agriflex with a view of assessing possible restructuring options”.
Centrex – via AgriFlex – operates the Ardmore phosphate rock mine south of Mt Isa in North West Queensland which is linked to the Port of Townsville via an existing rail line. Ardmore is one of the few remaining undeveloped high-grade phosphate rock deposits in the world, according to Centrex.
In February, the Centrex shipped 26,239 tonnes of phosphate from the Port of Townsville.
FTI administrator Dunn said the administrators would “seek to maximise the chances of the companies exiting the administration process in an orderly fashion”.
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“The administrators intend to trade the companies on a business-as-usual basis, while we conduct an independent assessment of the financial position and ongoing viability of the business,” Dunn said.
“A sale and recapitalisation campaign will also be undertaken in the coming weeks.”
A first meeting of creditors will be held in mid-March, administrators said.
The company’s collapse comes after Centrex was suspended from trading at its own request in December, pending the release of “announcements regarding the outcome of negotiations with its logistics provider and lender and a capital raising”.
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Centrex also said last week when requesting an extension of its trading suspension that “the continued trading in its securities was likely to be materially prejudicial to the proposed capital raise which is crucial to help stabilise and maintain its ongoing financial viability”.
The company was attempting to raise $10.4 million from shareholders, which it announced on 14 January.
It said proceeds would be used to fund plant upgrades and working capital, and followed “the successful execution of strategic agreements with its logistics supplier”.
At the time, Mencel said the entitlement issue was “a vital step in ensuring the financial viability of the company moving forward”.
Previously, the company noted an increase in logistics requirements arising from the increase in production and shipments at Ardmore meant Centrex accumulated logistics costs to rail provider Aurizon totalling $16.9 million to the end of 27 September 2024.
In its December quarter update, the company said it had just $463,000 in cash on hand, noting it had $4.1 million of receivables and $2 million in funds available under the Mt. Isa Transition Fund.
The collapse of Centrex means Aurizon has now been left in the lurch by two of its clients, the other being OneSteel – the operator of the Whyalla Steelworks – which went into administration in February.
The two newly insolvent customers owe Aurizon about $50 million, the company said.
“Aurizon holds security over certain assets for both customers and, in conjunction with the respective administrators, will assess options regarding the enforcement of those respective security interests to recover amounts outstanding, in addition to engaging with the administrators in relation to the continuation of services,” Aurizon said.
