Nexus Energy has entered administration, calling in McGrathNicol after a shareholder vote scuttled Seven Group’s 2c a share bid for control of the company.
The move had been widely expected after proxy votes announced on Wednesday revealed significant backlash to the Seven deal from investors.
In the end, about 57 per cent of shares were cast against the deal, well above the 25 per cent maximum permitted by Seven's proposal.
Matthew Caddy, Tony McGrath and Jason Preston of McGrathNicol will now assume control of the energy group, though the firm’s nine subsidiaries remain out of the hands of liquidators amid hopes the firm’s operations can continue.
“The boards of directors of the Nexus subsidiaries will be working with the voluntary administrators and Seven Group to put in place funding arrangements to enable the Longtom, Crux and Echuca Shoals projects to continue with minimal interruption,” Nexus said in a statement.
After strongly urging shareholders to support the Seven bid in recent weeks, the board expressed dismay that a deal could not be finalised.
“The board resolved to enter into the scheme following an extensive strategic review process that included consideration of a sell down of Longtom, Crux and Echuca Shoals, a whole of company transaction and alternative funding and refinancing solutions,” the board said.
“The key challenge has been the high gearing and significant capital commitments to support the asset growth plans.
"We are extremely disappointed that despite running a comprehensive process we were not able to secure a more favourable outcome for shareholders.”
It represents a major fall from grace for Nexus, which had a valuation of over $1 billion six years ago. Its record share price of about $2 was reached in 2008, a far cry from the 1.3c on offer before entering a trading halt on Thursday.
Meanwhile, Seven is still hoping to buy the firm's key assets from administrators in coming months.