Griffin Coal Administrator Signals Entire Sale of Griffin

4 February 2010 (Last Updated February 4th, 2010 18:30)

KordaMentha, administrator for Griffin Coal Mining, said it would prefer Griffin Coal was sold in its entirety as opposed to divesting company assets separately. The administrator was hired in January after the Western Australian mining company failed to make a bond payment. G

KordaMentha, administrator for Griffin Coal Mining, said it would prefer Griffin Coal was sold in its entirety as opposed to divesting company assets separately.

The administrator was hired in January after the Western Australian mining company failed to make a bond payment.

Griffin Coal owes Australia & New Zealand Banking Group, Commonwealth Bank of Australia, the Australian tax office and US bondholders over A$1bn ($877m), the Federal Court of Australia said.

A document released by the Federal Court of Australia said administrators have successfully applied for a deadline extension for conducting a second creditors meeting, according to Bloomberg.

KordaMentha partner Brian McMaster said more value for the mining leases could be realised through a share sale rather than an asset sale.

McMaster said attaining approvals to transfer mining leases can be avoided if the entire company is sold.

McMaster said KordaMentha has not yet valued the leases or hired a sales adviser as it is concentrating on solving operational issues.

"We’re doing a bit of landscaping before we put the house on the market," McMaster said.

Nomura Holdings said as of June Griffin Coal had valued its mining leases at A$728.5m ($638.9m).

Griffin Coal said it was experiencing a temporary liquidity shortage when it requested bondholders to give up their rights to take action against the company when it failed to make an interest payment on 1 December.

Nomura said once administration is completed such noteholders could recover less than 40 cents in the dollar.

McMaster said that more details on the timetable for a sale or recapitalisation will be provided in mid-April.