Pike River receivers fund below $5mln, claims balloon $10mln

Pike River receivers fund below $5mln, claims balloon $10mln

By Pattrick Smellie

Aug 12 (BusinessDesk) – Claims on Pike River Coal Ltd. have grown by almost $10 million to $119.9 million, while the receivers’ fund for dealing with outstanding creditors has fallen from $11.3 million to $4.8 million in the last six months.

During that time, the PricewaterhouseCoopers receivers, led by John Fisk, have paid just under half the employee claims outstanding, with payments to employees totalling $2.6 million and a further $3.0 million in employees’ claims.

The second six-monthly report from PwC, shows the top five groups paid out are, in order:

• Employees - $2.6 million
• Insurance premiums - $1.6 million
• Receivers’ fees and costs - $967,261
• Mine stabilisation costs - $728,736
• Donation to Pike River Miners fund - $500,000

The tax department is sixth, with a claim of $483,846.

Trade creditors, a separate, unsecured group from employees, including mine contract service companies’ claims, are almost unchanged at $15.4 million.

Total unsecured creditors’ claims have grown $2.3 million to $34.2 million, including $3.0 million of employees’ claims. New Zealand Oil & Gas Ltd. is the largest unsecured creditor, at $15.0 million - $3 million more than the $12 million short term facility it extended to Pike at the time of the Nov. 19 disaster, which claimed 29 lives.

The receivers identify only one new major source of cost, a $10.3 million “preferred” creditor claim for underground mining equipment purchased by Pike but unable to be used or returned.which is likely to be covered by insurance.

With insurance claims and the sales process the deciding factor for how much unsecured creditors are paid, PwC has withheld any detail of progress on either in the report.

“A group of parties” had undertaken due diligence on the mine assets. The receivers were now working with “short-listed parties” to advance sale discussion.

The report made no mention of the High Court action currently being considered over would-be buyer Solid Energy Ltd.’s claim on two leases for land on which Pike erected a rail-loading facility. The receivers are indicating they will remove $10 million of assets from the Ikamatua site if the leaseholders’ claim to new leases with state-owned coal miner Solid is upheld, while claiming Solid’s move was an attempt to warn off other bidders.

The receivers have spent the last six months disposing of assets not needed to maintain the mine’s potential resale value while disposing of assets and people who would have been developing the mine if it kept going.

Staff is down to 15 full-time and nine part-time staff, maintaining the mine site through the current sale process and assisting body recovery, following last Nov. 19’s explosion, which killed 29 miners, whose bodies remain trapped in the underground mine in the Paparoa Ranges.

The $11.2 million in funds on hand at Dec. 13 was down to 42.5% at June 13, at $4.8 million.

(BusinessDesk)

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