Openn Negotiation Ltd moves forward with a creditor-approved recapitalisation plan following voluntary administration, while its shares remain suspended on the ASX.
- Voluntary administration initiated in May 2024 due to insolvency concerns
- Deed of Company Arrangement (DOCA) approved by creditors in August 2024
- Recapitalisation plan includes a $211,000 share issue and board changes
- Shareholder approval sought for recapitalisation and share consolidation
- Company remains suspended from ASX trading as new directors explore value opportunities
Background and Insolvency Process
Openn Negotiation Ltd, a technology company specialising in real estate transaction platforms, entered voluntary administration in May 2024 after its board assessed that insolvency was imminent. The appointment of administrators from KordaMentha marked the start of a structured process to address the company’s financial distress and protect creditor and shareholder interests.
The administrators oversaw a series of creditor meetings and subsidiary restructures, culminating in the approval of a Deed of Company Arrangement (DOCA) in August 2024. This DOCA laid the groundwork for a recapitalisation strategy intended to stabilise the company’s finances and pave the way for a return to normal operations.
Recapitalisation and Shareholder Engagement
The approved DOCA includes a recapitalisation proposal involving the consolidation of shares and the issuance of approximately 101.6 million new shares to raise $211,000. This capital injection is designed to satisfy creditor claims and fund ongoing operations. Shareholder approval was sought in December 2024 for these measures, alongside potential changes to the board composition to support the company’s turnaround efforts.
Hall Chadwick was engaged to prepare an Independent Expert’s Report, which concluded that the recapitalisation transaction was fair and reasonable to non-associated shareholders. This endorsement is critical in securing shareholder confidence amid the company’s restructuring.
Financial Position and Operational Outlook
Despite the recapitalisation progress, Openn Negotiation’s shares remain suspended from trading on the ASX due to its financial condition. The company reported continued negative operating cash flows for the quarter ended 31 December 2024, with limited cash reserves of $40,000 and no payments made to related parties during the period.
New directors appointed post-DOCA are actively investigating strategic opportunities to drive shareholder value, including potential asset acquisitions that may necessitate further capital raising. However, no immediate plans for additional funding have been announced beyond these prospects.
Looking Ahead
Openn Negotiation’s path to recovery hinges on shareholder approvals, successful recapitalisation execution, and the ability of new management to identify and capitalise on growth opportunities. The company’s ongoing ASX suspension underscores the challenges ahead but also highlights the critical importance of the restructuring process in preserving value for stakeholders.
Bottom Line?
Openn Negotiation’s recapitalisation marks a pivotal step, but its future depends on shareholder backing and strategic execution.
Questions in the middle?
- Will shareholders approve the recapitalisation and proposed board changes?
- What strategic assets or acquisitions are new directors targeting to revive growth?
- When might Openn Negotiation’s shares be reinstated for trading on the ASX?