Creditors battle for Griffin Coal

Griffin Coal has delayed a control bid by power generator Bluewaters after a mystery creditor emerged with a rival plan, amid revelations the miner’s debts could be close to $US1 billion.

Bluewaters had sought to appoint Kordamentha’s Richard Tucker to take control of the Collie miner following major disruptions to the coal supply needed to run two of the state’s baseload electricity generators.

On Wednesday, Griffin launched an 11th-hour Supreme Court bid to temporarily stop the appointment of a controller.

But the matter made a surprise return to court today, where it was revealed another creditor was seeking to appoint a controller over the Collie miner.

There’s speculation the creditor is ICICI, the investment bank which took control of Griffin in 2017 after the collapse of Indian owner Lanco Infratech.

It’s also believed Deloitte personnel would be appointed to Griffin if that rival bid is successful.

Bluewaters’ lawyer, Joseph Garas, told the court it had reviewed fresh affidavits referencing a staggering $US954 million liability it was unaware of until now.

“It doesn’t appear to be something dealt with in any great detail within any of the financial statements supplied,” Mr Garas said.

“We aren’t suggesting there has been deliberate non-disclosure to ASIC [Australian Securities and Investments Commission], but we have no information on this rather extraordinary liability the company has.”

Mr Garas said Bluewaters was concerned it would be hamstrung, unable to step in and take possession of the assets, if an alternative receiver were to be appointed in the interim.

He requested the court release the company from its earlier undertaking not to act and dismiss the injunction application, insisting that it was effectively being left in limbo.

But Griffin’s lawyer, Konrad De Kerloy, requested Justice Jennifer Smith hold off on any decision until Monday.

“An appointment has not been made and it’s unlikely we’ll have a clearer idea until Monday,” Mr De Kerloy said.

“I think both parties accept that while the notice to appoint a controller is on foot, the defendant cannot direct the security trustee to appoint a controller or exercise step-in rights; but we want a guarantee.

“We are not proposing to withdraw the application or the proceedings, because there remains a risk.

“In our submission, you don’t need to do anything at the moment; the status quo is being preserved in the same way as an injunction. 

“It’s only if and when that falls away, we would press our application for an interim interlocutory injunction and then we would ask your honour to make a ruling.”

Justice Smith resolved to adjourn the matter until Monday afternoon, with Bluewaters undertaking to continue until then.

Crucial coal supply

Bluewaters, owned by Japan’s Kansai Electric and Sumitomo Corporation, produces about 15 per cent of the power on the state’s main grid.

Griffin’s coal supplies to the generator had fallen short by about 400,000 tonnes this year.

The miner claimed that was driven by an ongoing union dispute and a worker shortage, with the company declaring force majeure in recent weeks.

But it had promised to get its coal production back to normal within weeks.

Bluewaters had previously argued delaying the appointment would lead to the rundown of its coal stockpile, require the generator to buy electricity on market to satisfy contracts, and at worst, would be a risk to the state’s power market.

Griffin supplies coal both to the generator and to South32’s Worsley alumina.

Bringing a well-funded controller onboard to run Griffin would allow it to dig through overburden and resume stable coal supply, Bluewaters said.

Bluewaters had said it would finance the receiver to the tune of $20 million.

Business News understands Bluewaters has about 75,000 tonnes of coal stockpiled, while its supply agreements call for a maximum of 3,000t per day.

But the company had activated a coal preservation strategy, which would prolong the viability of the stockpile.