The company announced yesterday that McGrathNicol had been appointed as administrators.

An undersubscribed entitlement offer sparked the decision to call in the administrators.

Baralaba decided to withdraw an entitlement offer that had hoped to raise $78.3 million but only raised about $39.8 million. 

The company said that because the entitlement offer proceeds were less than what it had been seeking, the directors decided to appoint the administrators.

McGrathNicol said its staff were undertaking an urgent assessment of the company.

“The objective of the administrators is to work closely with management, employees, suppliers and customers to quickly stabilise operations and to determine the appropriate strategy for the business,” the firm said.

A first statutory meeting of creditors must be held within eight business days of the appointment of administrators.

The purpose of the first meeting is to allow creditors to determine whether a committee of creditors should be appointed and to consider the appointment of an alternative administrator.

The company’s major asset is the Baralaba open cut coal mine in central Queensland, which was targeting 150,000 tonnes-200,000t of saleable product in the 2017 calendar year and 2 million tonnes per annum to 2.2Mtpa in calendar year 2018.

As of March 31, Baralaba had about $9.4 million in cash and cash equivalents available for capital expenditures and working capital. It estimated it needed another $25 million just to complete the first stage of roadworks that would let it haul more than 1 million tonnes per annum the 60km from the mine to its train load out facility 2km east of Moura, Queensland.