The slide in its share price cut the value of non-executive director Mr Fitzpatrick’s almost 5 per cent stake from $11 million to just under $400,000 ahead of the collapse. It will now be worth nothing.
Mr Fitzpatrick is known to many in the football world as a former Carlton Football Club player and later a board member at the club. He is also the founder of multibillion-dollar infrastructure investor Hastings Funds Management and a former director of Rio Tinto.
He was unavailable for comment on Friday as he was travelling.
Earlier in the week, Carnegie requested the Australian Securities Exchange extend the voluntary suspension of its shares “pending an announcement regarding a strategic review of the company’s operations and a fund-raising initiative”. It said it would update the market on March 19.
Carnegie’s shares were suspended from trading in early March after it failed to lodge its half-year accounts on time.
It released its accounts on March 6, which revealed it had booked a loss of $45 million for the first half, in large part due to writedowns on the value of its intellectual property. It also blamed negative media publicity surrounding the wave energy project.
On Friday, KordaMentha told the Australian Securities Exchange Richard Tucker and John Bumbak had been appointed administrators of Carnegie and four subsidiaries – EMC Co, Energy Made Clean, and EMC Engineering Australia.
“The administrators are in discussions with key stakeholders to secure funding to allow the company to continue to trade whilst the administrators pursue a recapitalisation of the company via a deed of company arrangement,” it said, adding it would update the market in the coming days.
The McGowan government had for several months voiced concerns about the financial viability of the Carnegie Clean Energy as a result of potential changes to federal research and development tax concessions, losses from other operations and writedowns on other projects.
Regional Development Minister Alannah MacTiernan said the company’s collapse would be extremely disappointing for the company and its employees but she defended the government’s decisison to pull funding for the Albany wave project.
“The state government made a tough but sensible decision to protect taxpayers funds and today’s news is – regrettably – evidence that we made the right call,” she said.
A spokeswoman for the Clean Energy Finance Corporation said the corporation had no financial exposure to Carnegie Clean Energy from its 2014 loan.
“Carnegie wave energy secured alternative financing arrangements in November 2015 and the CEFC commitment was retired without the finance being drawn,” she said.
“We were pleased to support the evolution of Carnegie’s wave technology prior to November 2015 as a potential source of low emissions renewable energy.”
“The unexpected proposal to change federal R&D tax concessions created an environment of uncertainty that destabilised the company’s finances.
“Carnegie’s finances were in good order when the contract was signed,” she said.
Late last year, the company saw a change in chief executive, chief financial officer and chief operating officer within the space of a few months.
University of Melbourne climate and energy researcher Dylan McConnell said Carnegie’s wave technology had been “blown out of the water” by the cheaper cost of wind and solar.
“It was a challenging environment and the market has just moved away from them,” he said.
The technology is a hydroelectric system, like Snowy Hydro, that uses the ocean’s motion to force underwater buoys to pump pressurised seawater onshore to drive generators.
Mr McConnell said the collapse would put the brakes on the development of other wave energy companies in Australia.
“Carnegie were the leaders in it, so it’ll be hard for any other wave energy companies to get financing or government funding now,” he said.
Sarah Danckert is a business reporter.
Covering energy and policy at Fairfax Media.
Hamish Hastie is WAtoday’s business reporter.