Federal Government and other creditors facing | Australian Markets
The Federal Government and other creditors of mineral sands miner Strandline Resources are facing a $300 million wipeout even with the sale of the collapsed company’s flagship WA project to Japanese group Iwatani.
Iwatani, which already owns South West mineral sands miner Doral, is proposing to take control of the mothballed Coburn mine close to Shark Bay from receivers with a $15m money offer that will see secured creditors repaid much less than 5¢ in each greenback they’re owed.
The deed of company association for Coburn, if authorized by creditors subsequent week, would crystallise a loss of about $160m for the project’s greatest backer, the government-owned Northern Australia Infrastructure Facility.
A statutory report by directors Cor Cordis into the collapse of Strandline and its working subsidiary Coburn Resources reveals NAIF is owed $167m, having superior a remaining $5m simply three months earlier than the miner collapsed in February.
With bondholders owed $94m and NAB almost $17m, secured creditors alone are on the hook for Coburn for $277.5m.
Under the DOCA, they’d possible collectively get well much less than $10m, whereas 224 unsecured primarily trade creditors would share simply $1.5m to settle one other $49m of claims.
Subject to clarification about which company truly employed them, the deed funds would even be used to pay $5 million in excellent entitlements owed to almost 170 workers.
The ASX-listed Strandline was put into administration on February 21 after its backers ran out of persistence with protracted efforts to handle Coburn’s poor working efficiency and restructure the group’s hefty debt.
Receivers from McGrathNicol took control of the mine beneath an nearly simultaneous appointment by the secured creditors.
Strandline spent $260m developing Coburn to take advantage of a giant tonnage, however low-grade deposit, about 300km north of Geraldton.
It entered industrial manufacturing in November 2022 however struggled from the beginning, falling nicely short of the targets assumed within the feasibility examine that underpinned the development.
Directors sheeted home blame to varied elements, together with design and construction flaws, unreliable tools, labour shortages, and higher-than-expected handling and working prices.
However, directors Thomas Birch and Jeremy Nipps added that Coburn by no means produced enough to do higher than break even.
Strandline and Coburn, they mentioned, “were reliant on funding from lenders to bridge their collective working capital deficit in circumstances where operations were never generating sufficient cash or gross profit”.
Iwatani’s was one of two proposals acquired by McGrathNicol after a sale marketing campaign, with the receivers choosing the Japanese company, partly as a result of its offer was higher, it had more certainty and it “would see the continuation of the Coburn project after a short period of care and maintenance”.
Iwatani couldn’t be instantly contacted on Friday.
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