Wednesday 27 April 2016
Cockatoo Coal employees are expected to have a clearer idea about when they will receive their unpaid entitlements by tomorrow.
Seventy-five employees are owed tens of thousands of dollars, for work done before the company entered into voluntary administration in January.
Since that date a rescue package - known as a deed of company arrangement (DOCA) - has been agreed to by all creditors. However, the finalisation of key criteria required for the DOCA to be activated has not yet been completed meaning the funds set aside to pay employees can not be released.
According to a spokesperson for the administrator PPB Advisory more detail about the payments will be known tomorrow.
“There is no current update on the date of payment,” She told Shift Miner
“However we will be able to give more detail about the timing of the payment after the 28th April, by which time the DOCA should have been finalised.”
If everything goes to plan, employees will be the first to be paid their entitlements following the decision by creditors to accept the rescue deal offered by one of the company's major shareholders Liberty Metals and Mines (LLC).
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, 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.
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