EXCLUSIVE: Alternative bidder emerges for Solid Energy
By Pattrick Smellie
Sept. 17 (BusinessDesk) - A New South Wales-based mining investor, Mach Energy, is expected to make an alternative bid
for distressed state-owned coal miner Solid Energy at today's 'watershed' meeting of creditors in Christchurch this
morning.
BusinessDesk reliably understands Mach will seek a 30 day delay to the vote scheduled at today's meeting of Solid Energy
creditors, allowing time to undertake due diligence and make an alternative offer to the one put together by the
voluntary administrators, Korda Mentha, and the Solid Energy board.
It is understood the Mach bid would offer employees and trade creditors the same certainty of full payment as the Korda
Mentha plan and would seek to buy out bank and non-trade creditors immediately, rather than offering a payment at the
end of Korda Mentha's proposed 2 1/2-year asset realisation programme.
Little is known about Mach, which was registered with the Australian Securities and Investment Commission in October
last year. Its website is under construction and publicly available ASIC records give no clue to its ownership, although
its backers are understood to be Asian investors looking for opportunities in the coal sector created by the global
slump in coal prices that have forced Solid Energy into administration for break-up.
Korda Mentha's proposed Deed of Company Arrangement was unveiled on Sept. 10. At that time it had the support of a wide
range of banks, local authorities and creditors including KiwiRail and Fonterra, based on its potential to return
between 35 cents and 40 cents in the dollar following an orderly asset realisation process, for which the banks would
extend a two and a half year moratorium on debt repayments.
The Mach proposal's capacity to match or better that deal is not known and would depend on the outcome of due diligence.
However, by offering cash up-front, it might be expected to be offered at a discount to the Korda Mentha proposal, which
warned that immediate liquidation of the insolvent coal miner would likely yield just 15 cents to 20 cents in the
dollar.
The watershed meeting is scheduled to start at 11.30am.
(BusinessDesk)