The company which once promised to be Australia’s first sulphate of potash producer, Salt Lake Potash (ASX:SO4), has gone into receivership owing US$127 million just months after its plans to start production at its SoP plant in the WA outback hit the skids.

KPMG have come on board as adminstrators and Kordamentha has been handed the keys as receivers. It hopes to sell either Salt Lake Potash or its assets, including the Lake Way project, to recoup the cash owed.

That group includes Taurus Wealth Management, Sequoia Economic Infrastructure Income Fund, the Commonwealth Bank and the Australian Government’s Clean Energy Finance Corporation, which provided US$47million of the US$138m senior syndicated debt facility.

Salt Lake was unable to gather new equity to prop up its operations, with Sequoia telling the London Stock Exchange:

“The proposed equity raise has been unsuccessful and Salt Lake Potash have announced a Voluntary Administration of the company as at 20 October 2021.

“The Investment Adviser had been developing a contingency plan should the funding gap not be addressed.

“This contingency plan has now been activated in full alignment with the lender group.”

Salt Lake’s shares have been suspended since late July after operational issues at the Lake Way plant which saw it reduce its planned 2021 production from 165-185,000t to 85-105,000t of SoP. It had previously suggested first revenues from Lake Way, yet to be announced, were in the “very near term” as long ago as May.

At the time the company said it would need to raise new funds to keep going, with its CEO Tony Swiericzuk resigning in late August. Replacement Isak Buitendag only came on board on September 13.

Kordamentha’s Richard Tucker, who has been appointed as receiver alongside Craig Shepherd, said it expected “significant interest” from the sale and recapitalisation.

“The Lake Way project is largely fully developed and offers an opportunity for a turnkey project in a commodity of the future,” he said.

“Sulphate of potash is attracting significant interest globally as it fits within the ‘green’ investment thesis for a large number of global investors.

“Given SO4 has a world-class potash project in a favourable jurisdiction, we expect significant interest in the sale and recapitalisation process.”

The Lake Way project, located near Wiluna in WA’s Goldfields region, employed around 100 mostly FIFO workers.

There are a number of Australian companies working in the SoP space, with projects at various stages of development. Kalium Lakes (ASX:KLL), which owns the Beyondie project in the Pilbara, claimed the title of Australia’s first SoP producer earlier this month.