Panoramic administrators seek time extension

The Federal Court has approved a six-month extension sought by administrators of collapsed miner Panoramic Resources as they examine the dozens of expressions of interest to buy.

Federal Court of Australia judge Katrina Banks-Smith today granted FTI Consulting liquidators an extension of time to hold the second creditors meeting on July 23, instead of January 23.

FTI Consulting senior managing directors Daniel Woodhouse, Hayden White and Kate Warwick were appointed as administrators to Panoramic Resources in mid-December.

Operations at Panoramic’s Savannah nickel mine in the Kimberley region were also suspended earlier this month, causing hundreds of jobs to be cut.

In a Federal Court judgment delivered today, Justice Banks-Smith said the administrators would not be in a position in the short term to make recommendations to creditors.

The judgment revealed that about 25 expressions of interest to buy the business had been received, with the EOI process to open until January 31.

“After that date, parties will have the opportunity to conduct due diligence and submit final offers,” Justice Banks-Smith said.

“Mr Woodhouse said that for assets of this nature, there is a significant amount of technical information which must be made available to interested parties, and they must have time to complete their due diligence.  So much can readily be accepted.

“Mr Woodhouse said that due to the complex nature of the business and assets, he would expect the sale process to take in excess of three months to complete.

“Since their appointment the administrators have also undertaken urgent investigations into the companies and their key assets for the purpose of a possible sale, joint venture, or other recapitalisation.”

Justice Banks-Smith said the additional time would facilitate an orderly sale process to be carried out.

“In my view this is an example of a large and complex administration where a substantial extension of the convening period for the second meetings is clearly justified and appropriate … the matters raised by the administrators to which I have referred above are all relevant and cumulatively are persuasive,” she said in her judgment.

“I accept that if such a sale process is successful, it is likely to enhance the position for creditors, as compared with an immediate liquidation.”

According to the judgment, there were about 153 staff in Perth and the East Kimberley working for Panoramic and Savannah.

The administrators are undertaking a wind-down of operations after work at the Savannah mine was suspended that includes about $3.3 million in termination entitlements, the judgment said.

However, the judgment also revealed the administrators have referred to the possibility for the employees to be re-employed if a sale occurred.