Statement From The Administrators Of The Pasminco Group
I would like to confirm that we have been appointed as Administrators to the Group`s Australian operations only. We have not been appointed to the USA and Netherlands operations.
With respect to the overseas operations, these companies are wholly owned subsidiaries of Pasminco. These overseas companies are not subject to any insolvency administration and we are working with the directors and management of those companies to ensure the ongoing trading of the entire Group.
Liabilities
- Financier Debt totals about $2.86 billion.
- Total number of financiers: 36
- Trade creditors: owed approximately $200 million to $250 million
- Employee entitlements: estimated at $60 million for the Australian operations, excluding workers compensation and redundancy entitlements which are approximately a further $220 million.
- Total liabilities are therefore about $3.4 billion however all liabilities will need to be confirmed in due course.
As you would all be aware, we are continuing to trade the businesses of the Pasminco Group as normal.
We are and will continue to place orders with suppliers and pay all debts that we incur.
We have also stated that we will pay amounts owing to operating creditors of the business as at the date of our appointment and many will already have received a cheque from us.
We can also confirm that sufficient assets are available to ensure that employee entitlements will be paid in full. All accruing entitlements after this date will also be met.
It is necessary for us to meet the ongoing entitlements to enable the ongoing operations of Pasminco`s businesses around Australia and ensure there is as little disruption as possible and at worst "closure" to the trading of the businesses.
We have been very pleased with the smooth transition since our appointment and are very grateful to the efforts of all Pasminco employees and their union representatives, who have made our job easier in dealing with such a large group of employees spread around Australia.
In order to assist with the ongoing trading of Pasminco, members of our staff have attended all of the sites operated by the Group, including the overseas sites, to enable us to understand the matters affecting each site and deal with those issues.
Many of you would be aware that certain assets of Pasminco have been offered for sale prior to our appointment, namely the Century and Broken Hill mines.
We are continuing this sale process and negotiations are progressing with a number of interested parties. In particular, the Century Mine is a highly sought after asset that has attracted quite substantial interest.
Any sale of the assets will need to be considered in light of the linkages between each asset. For instance, the Group`s Dutch operations are dependent on the supply of zinc from the Century Mine.
With respect to the future of Pasminco there are essentially 2 broad options available to the Group:
- A restructure of the Group, which could involve various facets including the sale of certain assets, a reorganisation of the Group`s affairs and the retirement of debt.
- A possible sale of some the assets of the Group.
We will be reviewing the options available to Pasminco with an expectation that a Deed of Company Arrangement will be proposed to creditors at some time in the future.
Pasminco`s businesses and their assets are complicated given the size and nature of those assets. We expect that a sale and/or restructure of the affairs of the Group will take some time to be resolved.
These are all issues that will evolve over the coming months and we will work closely with the directors, management and the Committee of Creditors.
In the meantime, some of the other key issues that we will be required to deal with will include:
- Bedding down the business trading issues in the short term, including paying outstanding amounts, reviewing trading arrangements and understanding the business processes in place.
- We will be reviewing the options available to the Group, including restructuring the Group`s affairs and the sale of its assets. Our ongoing strategy with respect to the trading and possible sale of different assets is a matter that we expect to closely liaise with the Committee of Creditors.
As part of this restructure, we also expect that we will shortly apply to Court for a pooling order that will help ensure that creditors and employees of the Group are not disadvantaged by the current Group structure and to give effect to the Class Order and Deed of Cross Guarantee that exists.
- There has already been some publicity regarding the failure of Pasminco. Clearly the two main issues affecting the Group`s financial difficulties have been falling zinc prices and the Group`s foreign currency exposures.
- Finally, we will be required to deal with our normal statutory obligations as Administrators. One of the matters we will be arranging in the short term is that we will seek an order of the Court allowing us to extend the period within which to hold the second meeting of creditors.
As many of you would be aware, the second meeting of creditors is normally held within 28 days of the appointment of the Administrators. Given the size and complexity of this administration we will seek the Court`s consent to defer this meeting. We are yet to confirm the period that we will apply to extend the meeting for but we will certainly notify creditors of our intentions in this regard.
That is just a brief snapshot of where we are at so far. I am sure a number of you will have questions for us.
For further information
Peter Mahon
0418 351 754
Return to Home