NEXUS Energy has called in the administrators amid Seven Group Holdings (SGH) failed takeover bid for the oil and gas company which was firmly rejected by shareholders.

Despite the board of Nexus warning shareholders that administrators would be appointed if a majority of shareholders voted against the scheme of arrangement, they proved defiant at a shareholder meeting in Melbourne, with 57 per cent of shares voting against the deal. The scheme required the support of 75% of shareholders to be deemed successful.

As a result, independent restructuring and corporate advisory firm McGrathNicol were bought in to take control of Nexus’s assets, with Partners Matthew Caddy, Tony McGrath and Jason Preston being appointed joint and several voluntary administrators.

McGrathNicol said nine subsidiaries of Nexus had not been placed into administration.

“The boards of directors of the Nexus Subsidiaries will be working with the voluntary administrators and SGH to put in place funding arrangements to enable the Longtom, Crux and Echuca Shoals projects to continue with minimal interruption,” the company said.

Mr McGrath said it would be working with all key stakeholders to ensure trading operation continued, during which it would also “assess recapitalisation, restructuring and sale opportunities.”

SGH was viewed as Nexus’s potential white knight, with the company struggling with existing debt and its ability to meet working capital obligations was in doubt.

Nexus, which owns the producing Longtom gas project in the Gippsland basin and the Crux development project in the East Browse basin, held $4.8 million cash at the end of the March quarter, a far cry from the $33.6 million it had in the bank in the 2010 March quarter.

Kerry Stokes’ SGH’s attempted to acquire all of the outstanding shares in Nexus for 2c a share, with the offer also including working capital which would enable Nexus to continue its operations, including an up to A$40 million bridge-loan facility. However the offer came under intense criticism from shareholders with some believing the price undervalued the company and its assets. There were also concerns about the role former Nexus chairman Don Voelte had in the takeover, with Mr Voelte, also chief executive and managing director of SGH, resigning from Nexus about a month before the bid was lobbed.

Nexus said it had entered in the scheme with SGH after all other options came up short. The Melbourne-based company had undertaken an extensive strategic review process that included consideration of a sell down of its Longtom, Crux and Echuca Shoals assets. It also considered a whole of company transaction and alternative funding and refinancing solutions.

“The key challenge has been the high gearing and significant capital commitments to support the asset growth plans,” the Nexus board said.

“We are extremely disappointed that despite running a comprehensive process we were not able to secure a more favourable outcome for shareholders.”

A meeting of creditors will be held on 24 June in Melbourne.