Major West Australian coal supplier Griffin Coal will continue to operate while administrators assess whether a restructure of the debt-laden group is achievable.
The five coal mining subsidiaries of the unlisted Griffin group, which is also involved in agribusiness and property, were placed in administration today after missing deadlines for the payment of debt instalments and tax liabilities.
Griffin Coal is WA’s oldest and second largest coal supplier, and has total debts of about $700 million.
Its key assets include the Muja open cut mine, which is one of the largest in the world and has been in operation for 56 years, and an associated power station near Collie in the state’s southwest. The company produces more than 5 million tonnes of coal annually, most of which is used for domestic power generation.
It is understood the power stations have not been placed in administration but this could occur.
KordaMentha began talks with creditors, employees, unions, the WA government and other stakeholders today.
‘‘The administrator is going to put a proposal to us by lunchtime today and then we’ll determine where we go from there,’’ WA Energy Minister Peter Collier said.
KordaMentha is investigating the possibility of restructuring Griffin Coal’s debt but if this cannot be achieved, it will seek to sell the assets as a going concern, amid expectations there could be many interested local and overseas parties.
Griffin Coal has $US475 million ($529.5 million) worth of unsecured debt to US bondholders and missed a December 31 deadline for a $25 million payment.
It has also missed a deadline for a $5 million payment to the Australian Tax Office, the first instalment as part of $25 million settlement reached last year.
The original tax claim was about $200 million and there is speculation the settlement could be declared invalid due to the payment default.
KordaMentha partner Brian McMaster said in a statement it would be ‘‘business as usual’’ for Griffin Coal while administrators assessed the company.
Australian Manufacturing Workers’ Union state secretary Steve McCartney said the state government should strive to ensure Griffin Coal’s 500 workers do not lose their jobs.
Mr Collier said the government was ‘‘going to do all that we can to ensure the jobs are secure’’ but everything hinged on ‘‘what the administrator decides in terms of direction of the coal business’’.
He said coal remained a significant component of WA’s fuel mix.‘‘We rely on it for 30 to 35 per cent of our power generation ... and there’s no significant shift in the foreseeable future,’’ he said.
AAP
