Solid Energy's underground mine in Huntly, Waikato. Photo / File
Solid Energy's underground mine in Huntly, Waikato. Photo / File
Solid Energy New Zealand's creditors will get as much as 55 cents in the dollar after the failed state-owned enterprise's mines were sold to three parties, including a tie-up between ASX-listed Bathurst Resources and the Talleys Group.
Administrator's Brendon Gibson and Grant Graham of KordaMentha today said they expect returnsfrom the asset sales to be between 45-cents-and-55-cents in the dollar, above the top end of the 35-to-40-cents range initially estimated for a managed sale, they said in a statement. Three deals were signed and are expected to settle in the first half of 2017.
Phoenix Coal, a joint venture between Bathurst and the Talleys, will buy the Stockton export operation and two Waikato mines, while Palmer MH Group's Greenbriar purchased two Southland mines, and West Coast miner Birchfield Coal Mines purchase the Strongman and Liverpool mines on the West Coast.
The company was placed in voluntary administration last year after concluding it had no realistic prospect of refinancing $239 million of debt facilities due to mature in September 2016. The company's downward spiral began in 2013 when slumping global coal costs exposed its commercial error in carrying substantial debt on its balance sheet to pursue a variety of novel energy projects that a previous board and management believed would give the business a future beyond coal extraction.
"It took some time, but this is a very positive outcome for the SENZ board, staff and creditors," Gibson said. "With key mining assets sold as going concerns, SENZ anticipates a good majority of the jobs will transfer to the new owners."
Solid Energy chairman Andy Coupe said the values achieved, which weren't disclosed, reflected 18 months of work to ensure they were in the "strongest possible position for sale".
"The successful bidders were those who offered the highest aggregate value realisation for the group of assets assessed as a whole, underpinned by a high degree of confidence in their capability to complete the transactions," Coupe said.
Some of Solid Energy's smaller assets are still subject to ongoing discussions, and the company will provide an update once those are completed, he said.
Finance Minister Bill English and SOE Minister Todd McClay welcomed the sale, and that a condition of two of the sales was that they were confidential. Bathurst will announce details of its purchase on Wednesday, and the ASX-listed company has sought a trading halt in relation to the acquisitions and a capital raising.
As part of the sales process the government agreed to take responsibility for long-term rehabilitation obligations associated with acid mine drainage from the Stockton plateau. It currently estimates the cost to be $36 million, on top of earlier commitments.
