Griffin sale deadline pushed back again

ADMINISTRATORS of Rick Stowe’s failed Griffin coal and energy empire now hope to wrap up a sale of the debt-laden private group in December after being forced to seek more time to complete the process last week.

KordaMentha administrator Brian McMaster last Friday successfully won an extension in the Federal Court that pushes back the deadline for a second creditors meeting from September 28 until the end of February.

Previously, the administrators had been targeting a deal at the same time as this weekend’s AFL Grand Final.

Mr McMaster told WA Business News that he was now “targeting financial close by mid December”.

In a report to creditors this week, KordaMentha said indicative bids for Griffin’s Collie coalmines and power stations are now due next week, while final binding offers must be submitted by November 5.

The suite of assets in the block includes three mines at Collie, the nearby Bluewaters I and II coal-fired power stations and the big Emu Downs wind farm near Cervantes.

The latest creditors’ report puts Griffin Coal’s debts at $735 million, including almost $430 million owed to US bondholders and $38 million to the Australian Tax Office.

It also estimates the group owes another $200 million to related parties, notably $140 million to Mr Stowe’s family flagship, Devereaux Holdings.

Devereaux disputes that claim, and says it is owed only $78 million, and claims the difference relates to an error in the way tax losses were recorded by the consolidated group.

As part of the administration process, the administrators are also investigating whether Griffin traded while insolvent, and whether there had been any breaches of the Corporations Act by company management.

The creditors report also lifts the veil on the scale of the challenge they face in finding a buyer for either the coal mines or the power stations.

According to the report, Griffin Coal’s performance has worsened dramatically over the last 12 months, including the six months under KordaMentha’s control. The business booked a $20 million operating loss for the year, compared to a $6.3 million loss the previous year and a $19 million profit the year before that.

KordaMentha attributed the blowout to soaring production costs as the company was forced to strip more overburden, higher contractor costs and increased staffing requirements.

KordaMentha has previously indicated wide-ranging interest in Griffin’s assets from Australian and international groups, while recent Indian press reports identified Indian conglomerates Reliance Power, Adani Power and GMR Energy as being among the potential bidders.

However, Wesfarmers last month confirmed that it was no longer interested in acquiring the coal assets. Wesfarmers operates its own coalmines at Collie with a significantly smaller workforce.