LPMA DAs must concede or fight for Tahmoor sale

Of all the questions swirling around Tahmoor Coal Pty Ltd (Tahmoor), perhaps the most fraught involves which of the two sets of rival insolvency practitioners involved should have carriage of the proposed sale.

Tahmoor’s voluntary administrators Joe Hayes and Chris Johnson of Wexted Advisors, who emerged from yesterday’s first meeting undisturbed by any attempt to replace them, are adamant the sale be conducted by them.

But the William Buck trio of Michael Brereton, Sean Wengel and Rashnyl Prasad, who are deed administers (DAs) of the Deed of Company Arrangement (DoCA) through which Tahmoor’s parent company is proceeding towards effectuation, insist the Tahmoor share sale that they are already running continue under their control.

Liberty Primary Metals Australia Pty Ltd (LPMA) owns 100 per cent of Tahmoor’s equity and Brereton and his colleagues commenced a marketing campaign for the shareholding in mid-January. They’re up and running.

Hayes and Johnson, who were only appointed to Tahmoor on February 9, are focussed on a sale that benefits Tahmoor’s creditors generally, not one shareholder specifically.

They’re running at full throttle so as to be in a position to tell NSW Supreme Court judge Ashley Black that he should further adjourn the winding up application hanging over Tahmoor when the parties return to court on March 5.

To persuade the judge Hayes and Johnson need to first persuade Brereton and his colleagues to abandon their sale campaign and convince petitioning creditor on the winding up application Coal Mines Insurance Pty Ltd (CMI) to support a further adjournment. All the while hoping their funder doesn’t pull the plug. And therein lies something of an unknown.

The VAs have $40 million in funding pledged and $4.5 million already paid. But that funder is Clydesdale Engineering, a related party controlled by Tahmoor and LPMA director Sanjeev Gupta who is also the LPMA deed proponent.

Gupta’s already tapped Tahmoor for $472 million to bail out other entities in his sieve-like GFG Alliance.

Will he really want his LPMA DoCA derailed so Hayes and Johnson can run a campaign for the benefit of all Tahmoor’s creditors?

Assuming Hayes can extract agreement from the LPMA DAs and CMI, demonstrate that the Clydesdale funding is solid and show the court he’s sufficiently independent – his DIRRI documents eight meetings with Tahmoor’s directors, LPMA’s directors and the GFG Alliance advisors Olvera Advisors between May 2025 and his appointment – he’ll also need investment banking firepower to apply to the job of getting Tahmoor sold. Macquarie or UBS aren’t likely to win this gig. Houlihan Lokey or another mid-tier with specialist expertise is more likely.

Of all these challenges only one is a genuine obstacle. CMI has already consented to multiple adjournments. Clydesdale has so far coughed up almost $5 million to pay Tahmoor employee wages and other essentials. Barring any surprises from Justice Black, Hayes’ independence should be secure and advisors will be lining to help the VAs get a sale away, but only after Hayes and Johnson have confirmed that the sale is theirs to conduct.

Brereton, Wengel and Prasad are the maggots in the margarine. So far they’ve given no indication they’re prepared to abandon the Tahmoor share sale via the LPMA DoCA. If they refuse to concede, it’ll fall to Justice Black to anoint the victor.