Andrew Forrest’s Wyloo Metals has requested that the board of rare earths developer Hastings Technology Metals explain how it intends to repay its debt to the company and to clarify its position regarding its solvency.

Hastings was issued with a default notice in relation to a A$150-million Wyloo loan. Hastings disputes that a default has occurred.

Wyloo argues that Hastings defaulted on the conditions for the exchangeable notes when it borrowed money from Equator Capital Management, a company with ties to its executive chairperson Charles Lew.

In a statement on Friday, a Wyloo spokesperson expressed concern that Hastings’ latest borrowing, which gives priority repayment rights to Equator, could further strain the company’s ability to meet its obligations to long-term shareholders and creditors.

“Wyloo is alarmed that the company has taken on further indebtedness, especially to a related party of Mr Lew on a secured basis, ensuring repayment ahead of Hastings’ long-term shareholders and creditors,” a Wyloo representative said.

At the heart of Wyloo’s concerns is the looming redemption of the Wyloo exchangeable notes, which are set to mature in less than a year. Wyloo estimates that Hastings will need to raise about A$220-million to redeem these notes by their November 2025 due date, a daunting task given the company’s current financial trajectory.

Furthermore, Hastings must also secure an additional A$320-million to complete the construction of its flagship Yangibana rare earths project in Western Australia.

Wyloo’s statement questioned whether Hastings could maintain its status as a going concern, particularly as its liabilities grow while revenue generation from the Yangibana project remains months, if not years, away.

Adding further fuel to the fire, Wyloo denied claims made by Hastings in its public announcement that discussions regarding a potential restructure of the exchangeable notes were ongoing. The Hastings statement had suggested that talks were under way in advance of the notes’ maturity, but Wyloo stressed that no such discussions had taken place.

“Wyloo confirms that it is not currently in receipt of any restructuring proposal from Hastings, nor has it been in active discussions regarding such a proposal since submitting the Notice of Event of Default on 6 November 2024,” the spokesperson stated, adding that any assertion to the contrary was misleading.