Pike River Coal placed in receivership as insolvency looms
Dec. 13 (BusinessDesk) – Pike River Coal Ltd., whose main asset was devastated in a deadly series of explosions, has been placed in receivership by major shareholder New Zealand Oil & Gas.
“It is now evident that it will be an extended period before any resumption of mining can be contemplated, and with PRCL rapidly facing insolvency, receivership is an unavoidable step,” NZOG chief executive David Salisbury said in a statement.
“These are very difficult times, especially for the families of the 29 men who have lost their lives and for the Pike River miners facing redundancy,” he said. “Decisions on the mine’s future must at least await a conclusion to the recovery efforts, but NZOG is supportive of any intentions to eventually reopen the mine.”
Shares of NZOG fell 2.3% to 87 cents and have shed almost a third of their value on the coal mine’s demise. Pike’s stock has remained on trading halt.
Pike confirmed over the weekend that “it needs to address corporate solvency ahead of the extension of time that its secured creditors had provided in the immediate days following the mine explosion.” The would-be miner “has debts which are substantial and in excess of its cash and other immediately foreseeable sources of funds. “
John Fisk, Malcolm Hollis and David Bridgman of PricewaterhouseCoopers have been appointed.