Final Milestone Achieved in Solid Energy Asset Sales
Final milestone achieved in Solid Energy asset sales
31 August 2017 - The finalisation of the sale of the Stockton export coal operation and the two Waikato mines, Rotowaro and Maramarua to BT Mining completes Solid Energy’s asset sale process and effectively clears the path to the wind up of the company.
Solid Energy Chair Andy Coupe said that with this last milestone now achieved the company is on track to complete remaining operational and administrative activities by December 2017 prior to the company going into solvent liquidation by March 2018.
“The asset sales process has been a complex but successful one, both in terms of the return achieved for creditors and in securing and preserving jobs for our employees, which was an explicit goal of the company throughout the process” said Mr Coupe.
The asset sales process commenced in late 2015.
Chief Executive Tony King said “For the people working at Solid Energy there has been a lengthy period of uncertainty as to when or if operations would be sold or closed. It is immensely gratifying that in many instances all staff employed at an operation have been retained by the new owners, and while at other operations some have been made redundant, most have since been re-employed. The economic, com-munity and social impact in the regional locations where Solid Energy operated mines has been very positive as a result.”
Mr King noted that the fact the company has achieved targets across the full range of financial, produc-tion, safety, environmental and asset sales in its last financial year is a testament to the professionalism, focus and commitment of everyone from the coalface to the corporate office.
Once all sale proceeds are collected and final costs for the period to solvent liquidation are taken into account it is expected that participant creditors should see a return of approximately 60 cents in the dol-lar compared to the estimated 20 cents that creditors would have received if the company had gone into liquidation in September 2015.
Background - Solid Energy Asset Sales Process
Solid Energy entered Voluntary Administration in August 2015 after the directors concluded that the company had no realistic prospect of refinancing significant debt.
Under the Deed of Company Arrangement agreed with creditors in September 2015 the directors are re-sponsible for running an orderly sell down process to sell the assets of the company. All land, mines and other assets were offered for sale either as a whole or in parts, presenting an opportunity for those assets that are economically viable to continue trading under new ownership; delivering the best outcome for creditors and staff.
The company has placed significant focus through the asset sales programme on securing the path for-ward for the assets and facilitating employment opportunities for staff.
Asset Sales Progress
In October 2016 Solid Energy announced that sale and purchase agreements had been signed for the Stockton export coal operation; the two Waikato mines, Rotowaro and Maramarua; New Vale and Ohai coal mines in Southland, and Strongman, Liverpool and the Reefton mines on the West Coast.
Settlement for the Ohai and New Vale mines was reached in April with all of the mines’ employees and operations transferring to the new owner Greenbriar.
Settlement was also reached in April with Birchfield Coal Mines for the purchase of the Strongman mine, the Island Block project, the Mt Davy/Liverpool permit, and the Reefton coal distribution centre.
During August the sale of the remaining Reefton assets, comprising the Reddale and Burkes Creek min-ing operations with the associated coal washery and plant and equipment was completed with Moore Mining.
On 31 August BT Mining, a joint venture of Bathurst Resources and Talleys Energy Limited, settled for the purchase of the Stockton export coal operation and the two Waikato mines Rotowaro and Marama-rua.
Spring Creek is the only mine in Solid Energy’s asset sales portfolio that has not sold and the closure of the mine is currently underway.
Pike River Mine and East Mine were not included in asset sales programme.