PRL Offers $8.2M to Rescue Centrex and Agriflex in Voluntary Administration

Background and Administration

Centrex Limited (ASX, CXM) and its subsidiary Agriflex Pty Ltd entered voluntary administration on 3 March 2025 amid mounting financial distress. Joint administrators John Richard Park and Joanne Emily Dunn were appointed to oversee the companies’ affairs, investigate their financial position, and explore options to maximise returns for creditors.

Preliminary investigations revealed that the companies may have been trading while insolvent from as early as September 2024. This was evidenced by persistent cash flow difficulties, unpaid statutory liabilities, and ongoing operating losses, particularly at Agriflex, which operates the Ardmore Phosphate Project in Queensland.

Sale and Recapitalisation Process

Following their appointment, the administrators initiated a sale and recapitalisation campaign to preserve value. Multiple expressions of interest and non-binding offers were received, with PRL Global Limited emerging as the preferred bidder. PRL was granted exclusivity to conduct due diligence and negotiate terms, culminating in a formal Deed of Company Arrangement (DOCA) proposal.

The DOCA proposal includes an $8.2 million contribution from PRL, payment for unsold inventory, ongoing funding for holding costs, and the transfer of 100% of Centrex shares to PRL. The proposal also provides for the assumption of employee entitlements and the establishment of a creditors’ trust to distribute funds to admitted creditors.

Creditors’ Meetings and Recommendations

The second meeting of creditors, originally scheduled for 8 April 2025, was adjourned to allow finalisation of negotiations and preparation of a supplementary report. The reconvened meeting is set for 16 June 2025, where creditors will decide whether to accept the DOCA, end the administration, or proceed to liquidation.

Administrators recommend creditors approve the DOCA, citing less uncertainty and potentially higher returns compared to immediate liquidation. Under the DOCA, priority employee creditors are expected to receive full payment, while unsecured creditors may receive a dividend within months rather than years.

Legal and Regulatory Developments

To facilitate the share transfer to PRL, the administrators have filed an application with the Federal Court of Australia seeking leave under section 444GA of the Corporations Act. The hearing is scheduled for August 2025. Creditors and other interested parties will have the opportunity to be heard.

The DOCA is subject to conditions precedent including court approval, ASIC relief, release of security interests held by National Australia Bank and Aurizon Operations Limited, and removal of current directors. Failure to satisfy these conditions by the sunset date of 31 August 2025 may result in termination of the DOCA and potential liquidation.

Financial and Operational Outlook

The DOCA aims to restore solvency and enable the recommencement of operations at the Ardmore Phosphate Project. PRL will provide working capital and assume operational control post-completion. The administrators estimate that the DOCA will deliver better financial outcomes for creditors than liquidation, which is expected to yield minimal returns for unsecured creditors.

Employee entitlements will be paid in full under the DOCA, though the Fair Entitlements Guarantee scheme is only available if the companies enter liquidation. The administrators found no recoverable voidable transactions and estimate potential insolvent trading claims net of safe harbour protections.

Remuneration and Costs

The administrators seek creditor approval for remuneration capped at $2.5 million for their roles in the voluntary administration, DOCA execution, and creditors’ trust management. This reflects extensive work including the sale process, investigations, creditor communications, and preparation for court proceedings.