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Steve Beale and Chris Dunphy, MIPEC Stephen Bowers, Avenues of Highfields (L-R) Frank Gilbert, Raj Guruswamy (Adani), Julianne Gilbert MP (Member for Mackay) and Garry Scanlan (Greater Whitsunday Alliance). dragline Aboutusgeneric_1 (L-R) Chrissy Joll, Tracey Cuttriss-Smith, Kimberley Lehto-Head and Kristy Marks (Local Buying Foundation) csg (L-R) Peter Shaw, Deirdre Schill, Jason Sharam, Joanne Sharam, Charmaine Ivey-Nemitz and Chris Nemitz (Linked Group Services) Port Lyn Downing and Debbie Harding (both Techserve) (L-R) Matthew Perre(Helloworld) , Stacey Cole, (Helloworld) Craig Wood and Debra Wood (SEW Eurodrive). Aboutusgenericimage_3 Ray Fairweather Jo-Anne Burke, DB Scaffolding; Susan McGuire, Mayogroup Construction
Steve Beale and Chris Dunphy, MIPEC Stephen Bowers, Avenues of Highfields (L-R) Frank Gilbert, Raj Guruswamy (Adani), Julianne Gilbert MP (Member for Mackay) and Garry Scanlan (Greater Whitsunday Alliance). dragline Aboutusgeneric_1 (L-R) Chrissy Joll, Tracey Cuttriss-Smith, Kimberley Lehto-Head and Kristy Marks (Local Buying Foundation) csg (L-R) Peter Shaw, Deirdre Schill, Jason Sharam, Joanne Sharam, Charmaine Ivey-Nemitz and Chris Nemitz (Linked Group Services) Port Lyn Downing and Debbie Harding (both Techserve) (L-R) Matthew Perre(Helloworld) , Stacey Cole, (Helloworld) Craig Wood and Debra Wood (SEW Eurodrive). Aboutusgenericimage_3 Ray Fairweather

Cockatoo not to take - or pay
EMPLOYEE win but WICET lose in rescue deal with creditors
Wednesday 09 March 2016  

IF everything goes to plan, employees with a priority claim against Cockatoo Coal will be the first to be paid their entitlements following the decision by creditors to accept a rescue deal offered by one of the company's major shareholders Liberty Metals and Mines (LLC).

However large unsecured creditors like the remaining partners in the Wiggins Island Coal Export Terminal (WICET) and Aurizon will have to write off millions of dollars of bad debt following the restructure.

Under LLC’s rescue deal a $100 million loan facility is being offered to Cockatoo in return for about $10 billion newly issued shares - slightly less than a third of all shares issued at present.

Seventy-eight million of the $100 million debt facility will go toward paying creditors’ claims, which is particularly good news for terminated employees and small-unsecured creditors, (owed up to $25,000) because they are likely to be repaid in full.

However it is a bitter pill to swallow for the larger unsecured creditors like WICET and Aurizon who will most likely receive just the first $25,000 of the money owed to them, irrespective of what is owed in total.

In the case of WICET, the cost of Cockatoo’s failure to fulfil the take or pay contracts for coal exported through the facility at Gladstone is estimated to be more that $600 million - the burden of which will be shouldered by WICET’s remaining partners.

Aurizon, who his owed millions of dollars in access charges, has just written it off as bad debt.

The rescue deal will have no effect on the rights of the secured creditors.

It is still unclear whether the decision by creditors to accept the bailout will mean a quick resumption to mining operations at the Baralaba mine which went into a care and maintenance a month ago costing around 75 jobs.


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