Griffin administrators push DOCA deal

The administrators of coal business Griffin have urged creditors to back a deed of company arrangement as the best way of securing a return - but the timing of one-third of the sale proceeds hinges on the development of a rail export route via Bunbury.

In a report to creditors of Carpenter Mine Management Holdings Ptd Ltd lodged on the KordaMentha website, the administrators said that the sale of the coal assets to Indian group Lanco Infratech was dependent on the DOCA being accepted by creditors.

Lanco Infratech has agreed to pay $750 million for the coal assets, with a $500 million down payment which includes about $19 million to cover employee entitlements and environmental requirements.

A further $100 million would be due within two years of the deal being accepted, or earlier if approval for a railway line from the Collie operations to Bunbury is granted.

A further $150 million would be payable within four years, or earlier is coal is exported from Bunbury.

The administrators indicated in their report that they did not believe a successful legal action could be mounted aganist the directors of CMMH for insolvent trading. In addition, such a move would require liquidation which would end the deal with Lanco Infratech.