Aerison enters voluntary administration over a neglected $47.5m invoice sent to Roy Hill

Engineering company Aerison (ASX:AE1) has entered voluntary administration barely 2 years after it first listed on the ASX. What happened?

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A long history, but a quick downfall

This company’s history went back to 1989, but it only listed in 2021 amidst booms in the ASX IPO and commodities markets. As a $130m revenue company that serviced companies, such as BHP and Fortescue – and had a pipeline of over $5bn – Aerison would have appeared a safer investment than pre-revenue explorers.

However, it entered a trading halt in the first week of May pending an announcement of ‘a material sum owed to it…and the company’s assessment of financing arrangements with its principal debt provider’.

The following week, it told shareholders Roy Hill iron ore (an operation owned by Gina Rinehart) owed it $47.5m and it would seek to recover that money. But that was the last investors heard from the company until it announced it entered voluntary administration last night.

It has also emerged that the problems could have run deeper than one contract. In its FY22 results released in February, it revealed a big financial hit from a 2019 contract with BHP Nickel West. The ASX sent Aerison a query as to why it did not reveal it earlier.

Is it all over for Aerison?

As we noted in our article from earlier this week about the voluntary administration process generally, it is difficult to tell – it will depend. Aerison is probably not over as a company. Media reports in Western Australia have suggested that there would be significant interest in buying the company’s assets.

But for retail investors, it could well be the case that they have their entire investment lost. We don’t imagine that a new buyer will want the additional stress of being a listed company, knowing full well how it turned out for Aerison in barely 2 years, not to mention that shareholders would likely scramble to the exits if and when trading resumed.

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