The Collie power stations of Rick Stowe's failed Griffin Coal business are likely to be sold by the end of March, administrator Brian McMaster said today.
The Collie power stations of Rick Stowe's failed Griffin Coal business are likely to be sold by the end of March, administrator Brian McMaster said today.
The KordaMentha partner yesterday concluded the sale of Griffin's struggling Collie coal operations to India's Lanco Infratech for a reported $830 million, guaranteeing a near full return to Griffin's myriad creditors, including US bondholders owed over $430 million.
The sale, for a significantly higher price than most observers expected, leaves Griffin's Bluewaters I and Bluewaters II coal fired power stations at Collie as the primary assets still to be sold or recapitalised.
Though the power assets are owned by a subsidiary of the failed Griffin Coal business, they are operated by a separate Griffin Group company which did not go into administration.
Mr McMaster said that with the sale of the coal operations now finalised, there was no rush to wrap up a deal for the power assets, which were currently profitable. The plants cost over $1.2 billion to construct.
"Nothing (will be done with them) until we finish off this sale, bed all this down, and then we'll look at them again early next year," he said.
"We'll do it probably toward the end of the first quarter of next year. There's no mad rush - they (the power stations) wash their face - so it's not really a pressing thing from our perspective."
Mr McMaster confirmed that there had been proposals to take on the power stations during the formal bidding process, but that the sale of the coal operations had added to the appeal of the power business.
"We've got some proposals there we could move forward with if we wanted to, but we just think its easier ... and it makes more sense for people to buy the power stations when they know who the supplier of coal is," Mr McMaster said.
"So we'll leave it for now and do it down the track."
Lanco, which is in the midst of expanding its own generation capacity in capacity from 2000 megawatts to over 13,000 MW, is considered only an outside chance of bidding for the power stations.
But strong interest is expected from other Indian groups, as well as unsuccessful Japanese and Chinese bidders for Griffin.
Lanco's primary intent is to rapidly expand Griffin's coal output from the current 4 million tonnes a year to 15 mtpa, the bulk of which would be exported for use in its own power stations.
It is also expected to soon sign a replacement 2.6 mtpa supply contract for Perdaman Chemical's proposed $3.5 billion urea plant at Collie, as well as maintain supplies to the Bluewaters power stations, which have existing environmental approvals to build two more generation units.
Mr McMaster said he did anticipate any significant technical hurdles to Lanco's export plans, despite Collie coal's reputation for volatility and high water content.
"We just finished exporting a million tonnes of it," he said.
However, Lanco will face substantial infrastructure challenges given the likely need for a dedicated coal export facility at Bunbury and associated rail link to cater for its proposed export volumes.
The Lanco deal is slated for settlement by February 15, with creditors likely to receive their dividend by the end of March.
