Creditors will be able to vote whether they should accept a DOCA and on the future of the company on 17 September.
KordaMentha administrator Brendon Gibson said: “We have been working with the Solid Energy Board and management to ensure the best possible outcome for all creditors via the voluntary administration process.
“The DOCA is in our opinion the preferred option. It enables a progressive sell-down of the assets over the next two and a half years. In our opinion, on balance the DOCA provides the best return for all creditors.”
The key results of the Administrators’ analysis are an estimate that the return to all creditors will be 15 – 20 cents in the dollar for liquidation.
If the DOCA is supported, trade creditors and employees will receive 100 cents in the dollar.
Rehabilitation costs will be covered by the Crown subject to a cap minimising the risk to Councils.
Other creditors, including the Bank group and Bondholders, are expected to receive 35 – 40 cents in the dollar.
Gibson said the key reasons for the material difference in return are the forecast improved return from an orderly realisation of the assets and the decrease in liability claims from parties as a result of DOCA negotiations.
“We are advised, subject to finalisation of some minor matters, that the Banks and TSB as the largest Note Holder have agreed to support the proposal which is encouraging for the vote on 17 September,” Gibson said.
