Monday 17th October 2011 2 Comments
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The largest shareholder in the Pike River coal mine, New Zealand Oil & Gas, has committed a further $5 million to help meet mine stabilisation costs after the receivers warned they had exhausted their working capital.
That’s on top of the $12 million NZOG agreed to advance to Pike immediately after the Nov. 19 explosion that killed 29 miners and led to the mine’s closure and receivership.
The $12 million unsecured advance, which has since ballooned out to $15.3 million with interest and other expensives, was the second tranche of a $25 million facility that was to have helped the mine reach full production. Instead, NZOG let the advance go ahead out of moral obligation to assist in the aftermath of the disaster.
As a loan to the receivers, accounting firm PwC, the latest $5 million credit line ranks ahead of other secured and unsecured debt, and at this stage, only $4.3 million has been drawn down.
The additional funds have gone to stabilisation and mine re-entry costs, as the receivers seek both to sell the Pike River assets and to find a way to retrieve the miners’ remains.
This brings the total amount still owed to NZOG to $37.9 million in secured and unsecured debt. The outstanding $22.6 million of secured debt the new advance and deducts $38.3 million in insurance payments now received against secured debts. The $15.3 million in unsecured debt will be reduced by a $3 million payment which will be received shortly, NZOG said in a statement to the NZX today.
NZOG also said the Pike River receivers have begun repaying creditors after receiving over $80 million in a final settlement from the mine’s insurers, details of which were announced last month.
The announcement in September saw NZOG share prices, which had dropped by 28% over the year, bounce up 5.9% to 72 cents. However, the shares have eased since and remained unchanged at 63 cents after today’s announcement.
NZOG say that the receiver’s other first ranking secured creditor, Bank of New Zealand has also been paid the $23.7m it was owed.
The agreement in September also included a subsequent part-payment scheme for unsecured creditors, who voted unanimously in favour of the proposal which would see them paid up to a cap of $10,000 plus 20% of any outstanding amount above that, up to a capped aggregate of $10.5 million.
NZOG says it understands that 243 unsecured creditors will be paid in full and another 222 partially repaid under these arrangements.
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