15/12/2010 - 12:06

Potential Burrup shake-up in the mix

15/12/2010 - 12:06

Bookmark

Save articles for future reference.

A major restructure of Pilbara fertiliser producer Burrup Holdings is believed to be under discussion in a bid to resolve the ongoing battle between its estranged owners, Indian businessman Pankaj Oswal and Norwegian giant Yara International.

A major restructure of Pilbara fertiliser producer Burrup Holdings is believed to be under discussion in a bid to resolve the ongoing battle between its estranged owners, Indian businessman Pankaj Oswal and Norwegian giant Yara International.

Yara declined to comment today, while Burrup director Wolfgang Jovanovic last night said only that it was "business as usual" at the fertiliser producer.

However, WA Business News understands that a series of meetings have been held so far this week to discuss ways to resolve the two parties' differences.

It is also understood that those discussions include the possibility that Yara may buy Mr Oswal's controlling stake in Burrup and assume sole control. The possible sale of Yara's stake to Mr Oswal is also believed to be under discussion.

Yara and Mr Oswal, who with his wife owns 65 per cent of Burrup Holdings, have been at loggerheads over the company's financial dealings and offtake arrangements for months.

That dispute culminated last month in Yara successfully taking Burrup to the Federal Court to gain access to the company's accounts.

Yara argued in court that it needed to see the accounts, which were at that stage four months overdue, because it had several concerns about Burrup's financial dealings, including allegations involving millions of dollars in unauthorised related party transactions and differential dividend payments.

In particular, Yara alleged that it had received only a fraction of its share of a $30 million dividend when it was declared in mid 2009 while the Oswals were paid in full on the due date. It finally received the outstanding sum last month.

Yara also raised its concerns over a $22 million unauthorised related party payment using Burrup Holdings funds, and separate payments to shipping company Maruti Shipping. Yara told the court the $22 million payment related to a $US350 million bank facility, known as the PLAS facility, for which Burrup did not appear to be liable

Ruling on Yara's application last month, Federal Court Justice Michael Barker said documents tendered in the court showed Yara had a "reasonably held" concern that the $22 million appeared to have been paid by Burrup to Mr Oswal "in apparent satisfaction of certain ... obligations owed by him to the ANZ Bank".

Conversely, Mr Oswal accused Yara of taking court action in a "cynical attempt to muddy the waters" in relation to a commercial dispute over the pricing of ammonia delivered to Yara under its offtake agreements with Burrup.

Burrup also took action in the Supreme Court to force Yara to allow Burrup's proposed reversion to unlisted private company status, in accordance with an earlier agreement signed by the two companies.

The proposed change of status followed Burrup's decision to finally abandon plans for a float of the company earlier this year.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options