With the first creditor’s meeting held at the Brisbane Convention Centre yesterday, PPB announced a frequently-answered-questions document designed for Bandanna’s shareholders.
“The administrators will be carrying out investigations as to how this came about,” PPB said on the topic of why Bandanna and its three associated companies entered voluntary administration last week.
“The preliminary view is that the following combination of factors put the companies in an unviable financial position:
Contingent liabilities arising from agreements with Wiggins
Island Coal Export Terminal
The cost of dealing with objections and compensation to
landowners for the mining licence application to be approved
- The declining price of coal.
The second creditor’s meeting is scheduled for October 28. The creditors will either vote to liquidate Bandanna, enter a deed of company arrangement or return the company to its board of directors at this meeting.
Last week Bandanna chairman John Pegler blamed the delayed approval of the Springsure mining lease plus the decline in thermal coal prices.
At the time, Queensland Resource Council CEO Michael Roche was still confident that Bandanna’s flagship Springsure Creek longwall project, which has state and federal environmental approvals, would proceed in some shape or form.
Bandanna previously flagged starting construction of Springsure Creek in the September quarter of 2014, with first development coal expected in 2015.
The southern Bowen Basin thermal coal project was initially targeting 5.5 million tonnes per annum of capacity with first longwall coal expected in the second half of 2016.
Explorer Acacia Coal has also been affected by Springsure Creek issues, having previously delayed its Comet Ridge project, which is targeting 350,000tpa of coking and thermal coal.
“Acacia has an agreement with Bandanna for the Comet Ridge project to access the Triumph Creek train loading facility, part of the Springsure Creek infrastructure proposed to be sited on Acacia’s tenement,” it said in late July.
Construction of WICET, which is targeting 27 million tonnes per annum of throughput capacity by early 2015, is getting closer to completion.
The initial WICET consortium comprised Xstrata (now Glencore), Bandanna, Caledon Coal, Cockatoo Coal, Aquila Resources, Yancoal, Wesfarmers and New Hope Coal.
Bandanna’s move into voluntary administration also followed fail talks on restructuring a Credit Suisse loan facility.