Michael Brereton.
Joe Hayes.
In approximately 24 hours a phalanx of expensive lawyers will assemble in court room 8c of the NSW Supreme Court ahead of the pending hearing of an application to wind up Tahmoor Coal Pty Ltd (Tahmoor).
Seeking to delay that hearing will be Wexted Advisors’ Joe Hayes and Chris Johnson, who as the recently appointed administrators of Tahmoor want a further eight week adjournment of the winding up hearing to allow them time to sell the coal mine located west of Wollongong as a going concern.
Given the presence of some $40 million in funding being made available to the administrators by a related entity in the form of Clydesdale Engineering Pty Ltd, Hayes and Johnson anticipate that NSW Supreme Court judge Ashley Black will see merit in allowing the sale process to proceed.
But Hayes and Johnson aren’t the only ones wanting to conduct a sale process in relation to Tahmoor and their plan’s not fool proof.
Tahmoor, as has been widely reported, is part of the slew of entities blinked to liquidity-challenged industrialist Sanjeev Gupta.
Another of Tahmoor’s sibling entities, Liberty Primary Metals Australia Pty Ltd (LPMA) has also been externally administered, though since creditors accepted Gupta’s proposal for a deed of company arrangement (DoCA) late last year, LPMA’s deed administrators have ostensibly had one job. Sell the 100 per cent shareholding LPMA holds in Tahmoor.
At the most recent meeting of the LPMA Committee of Inspection (COI) for which Minutes are available deed administrator Michael Brereton of William Buck said it was the deed administrators’ view that “the most efficient method of realising value in Tahmoor is through a sale of its shares at the shareholder level.
“A liquidator appointed to Tahmoor would not have authority to sell its shares and instead would be limited to conducting an asset sale,” Brereton concluded.
The meeting was held in late January, but Brereton made no reference to the implications of having an administrator appointed to Tahmoor, perhaps because he knew such an outcome would restrain him from pursuing the share sale and contradict the intention of the DoCA and its proponent. In other words it wasn’t worth serious consideration.
But Hayes and Johnson, who were appointed by Gupta approximately two weeks after the LPMA meeting, are adamant that Tahmoor should be sold by them at the asset level and without their consent or a court order, Brereton cannot advance the share sale he’s been working on since early January.
You have to wonder about Gupta’s intentions. He is a director of Tahmoor and of LPMA. He’s the LPMA deed proponent and through his GFG Alliance has been funding the LPMA DoCA as per its terms.
So far Brereton has not given Hayes and Johnson any indication of whether or not he intends to make an application to the court for an order permitting him to proceed with the share sale, a move which would represent the opening of a crazy new ride at the Gupta Land fun park.
It would mean Hayes and Johnson would have to consider whether or not to oppose such an application knowing that if they did, creditors would be contemplating a scenario were competing external administrators were slugging it out at great legal expense whilst being funded by the same source.
We’ll know more tomorrow, including whether Gupta has any other tricks up his sleeve, like proposing a DoCA for Tahmoor.
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