Former Solid Energy JV partner, GTL, seeks to sell briquette plant

Tuesday 3rd March 2015

GTL Energy (New Zealand), Solid Energy's former partner in an experimental briquette making plant in Southland, narrowed its loss in 2014 in a year when it garnered no revenue and began preparing for the sale of the Mataura briquette plant, its biggest asset.

The local unit of South Australia based GTL Energy reviewed options for the plant in the second half of calendar 2014 and began "a programme of disposal to test the market" in January this year. Its loss narrowed to $699,809 in the 12 months ended June 30, from $761,289 a year earlier, according to the company's annual report.

The briquette plant had been a joint venture with Solid Energy, which was seeking to develop low grade lignite coalfields in Southland, among a range of developments that were jettisoned when slumping global coal prices left the state owned enterprise with too much debt and derailed former chief executive Don Elder's efforts to build a broad based energy company. Solid Energy wrote down the $33 million plant by $26.2 million in 2013 and sold its interest to GTL the following year.

A spokesman for the parent GTL didn't immediately return calls. The company has a proprietary technology to remove moisture from 'low rank' coals, raising their energy content and market value. In addition to the Mataura plant, it had a pilot plant at Golden, Colorado, and was producing briquettes at a facility in South Heart, North Dakota, had plans for a facility in Indonesia and was seeking licence agreements with other third party developers, according to its website.

The plant may be on the market for closer to $1.1 million, based on GTL Energy (NZ)'s accounts, which include a non-current asset held for sale at cost of $1.08 million.

The auditor for the New Zealand unit's accounts again added an emphasis of matter, noting that current liabilities exceeded current assets by $2.3 million. The company itself said it was economically dependent on the financial support of its parent.

Accumulated losses rose to about $2.2 million in 2014 from $1.49 million a year earlier.

BusinessDesk.co.nz

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