Bids In For Macbank's Beaconsfield Debt
The Age
Monday December 4, 2006
BIDDING for Macquarie Bank's $48 million parcel of debts connected with the troubled Beaconsfield mine in Tasmania has closed with at least two expressions of interest.
The closing of the tender on Friday coincides with fresh court action this week involving disgruntled shareholders in the mine's 51.5 per cent owner, Allstate Explorations, partly over Macquarie's 2002 acquisition of the debt. The bank decided three weeks ago to sell the debt and hand the sale proceeds to the mine's employees, replacing its May promise to give the debt to a trust for the miners' benefit.The trust was proposed to help the Beaconsfield community after the April mine collapse that killed Larry Knight and trapped Brant Webb and Todd Russell underground.On November 13 the bank said it had been unable to find anyone willing to accept the role of trustee, so it appointed insolvency firm KordaMentha to find a buyer. Employees will decide whether to accept any offer. Last week Allstate, which has been in administration since 2001, and its junior joint-venture partner in the mine, Beaconsfield Gold, expressed interest in buying the Macquarie debt. Its future value depends on whether and when regulators allow the mine to reopen. If production does not restart, the debt will have no value. The sale could benefit the miners by releasing funds to them more quickly than a trust would have done. It could also help bring Allstate out of administration and restore an orthodox board to oversee mining. But a sale before the mine's future is known could deliver employees a smaller benefit if it reopens and performs well. In its statement last month, Macquarie said potential trustees had been unwilling to participate because of the "unusual" nature of the trust and its assets. It said a further complication was Federal Court action involving the bank and Allstate's administrators, Michael Ryan and Tony Woodings, from Perth insolvency firm Taylor Woodings. Mr Ryan and Mr Woodings have been ordered to answer questions at a public examination, and Macquarie has been ordered to produce documents. The orders, which were obtained by Allstate shareholder Simon Evans, have been frozen pending a challenge to their validity due to be heard this week.Macquarie has been Allstate's banker since 1998. In March 2002, nine months after Allstate went into voluntary administration, it paid $300,000 to buy intercompany debts with a face value of $51 million. The administrators, who ran the mine until the fatal accident, repaid $3.5 million of the intercompany debt to Macquarie, more than an 11-fold return on its investment.KEY POINTS? Mine part-owner Allstate and partner Beaconsfield Gold express interest in buying Macquarie's debt parcel.? The bank will hand sale proceeds to the mine's employees.
© 2006 The Age
