Shareholders of Jervois Global (ASX:JRV) are revolting against the company's AU$233.5 million recapitalization deal, accusing the board and management of erasing AU$1.6 billion in shareholder value, according to a Thursday report by the Australian.

The deal, which will leave shareholders empty-handed, involves Jervois entering voluntary administration under Chapter 11 of the US Bankruptcy Code, and being acquired privately by its major US lender, Millstreet Capital Management, the report said.

Investors are pushing for an emergency general meeting (EGM) to block the deal, calling for the termination of the recapitalization and the appointment of an Australian administrator, the report added.

The group, representing over 5% of Jervois's shares, seeks to pass motions for a vote of no confidence in CEO Bryce Crocker and the board.

The recapitalization, disclosed in January 2025, will allow Jervois to enter administration and become privately owned by Millstreet, with Crocker and other executives remaining in place, and follows loan waivers granted by Millstreet as cobalt prices fell.

AustralianSuper, Jervois's largest shareholder, stands to lose over AU$100 million but is not part of the EGM push.

Despite exploring alternatives, Jervois has defended the recapitalization, citing the impact of low cobalt prices and excessive debt.

Shareholders have filed complaints with the Australian Securities and Investments Commission (ASIC) and the Australian Securities Exchange (ASX), accusing Jervois of neglecting financial concerns before the deal with Millstreet.

Both ASIC and the ASX are reviewing the complaints.

Jervois did not immediately respond to MT Newswires' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)