MIDWEST Corporation has opened its rights issue almost four months after putting its plan to long-suffering Kingstream Steel shareholders.
Midwest, a merger between Koolanooka Pellets and Kingstream, told shareholders in April it could get the company trading again by mid-July if successful with a planned May prospectus.
By participating in the offer, shareholders can retain up to 70 per cent of the company.
Midwest is aiming to raise $6 million, but $3 million will be sufficient to retire the deed administrator, terminate the deed of company arrangement, retire debt and seek the lifting of the company’s trading suspension.
The company has iron ore tenements at Koolanooka, Blue Hills and Weld Range, and wants to export haematite ore to Asia, for initial cash flow.
However Midwest has much bigger plans – to develop a $540 million iron pellet project.
Midwest is led by managing director Stephen de Belle, chairman Jesse Taylor and director Bob Duffin.
Kingstream was placed into administration in November 2001.
Joint administrators are Norgard Clohessy partners Bryan Hughes and Vincent Smith.
