Solid Energy, operating under a Deed of Company Arrangement (DoCA), reported EBITDAF of $89 million for the 2017 financial year, up from $16 million in the previous year.
The result comes on the back of short-term upswings in international coal prices coupled with consistent performance across domestic operations, and was achieved amidst significant challenges for the company as it navigated the sale of its core mining assets and operated within the tight cost control pressures of the DoCA.
At the close of the financial year the asset sale process was substantially complete, with the sale of the Stockton export coal operation and the two Waikato mines to BT Mining finalised just outside the financial year in August 2017.
Cash returned during the year to Participant Creditors under the DoCA was $98 million.
Solid Energy Chairman, Andy Coupe, says that once the remaining sale proceeds are collected and the final costs for the period to solvent liquidation are taken into account, Participant Creditors should see a return of approximately 60 cents in the dollar, with the possibility of contingent payment arrangements based on post settlement coal prices lifting this return higher still.
“This compares very favourably to the independently estimated return of 15 – 20 cents in the dollar had liquidation occurred immediately, and is a pleasing improvement on the 35-40 cents in the dollar expected under the DoCA,” says Mr Coupe.
“In addition to the fact that all trade creditors at the time of the company entering voluntary administration were, and continue to be paid in full, one of the best outcomes that Solid Energy has been able to secure through the sales process is the preservation of jobs and employee entitlements, and the continuation of businesses contributing vital economic, community and social benefits in the regions.”
Mr Coupe said that some 95% of staff at mines that have been sold have transferred to the new owners. All staff – both those transferring and those who have been made redundant – have received their full entitlements; an outcome that would not have been achievable in a forced liquidation.
Chief executive Tony King says that Solid Energy ended the year with its best ever safety record, recording a total reportable injury frequency rate of 2.96 per million hours and lost time injury frequency rate of 0.75 per million hours; significantly better than industry averages and comparable with many lower hazard industries. “The company’s health and safety management system will be an enduring positive legacy as all new owners of the mining operations have continued to implement the management system” says Mr King.
Mr Coupe acknowledged the commitment of directors, management and staff through a very challenging year in which, despite the distractions and demands, the company achieved targets across the full range of financial, production, safety, environmental and asset sales requirements.
Solid Energy is now well-advanced in meeting its obligations under the DoCA, and is progressively completing final operational and administrative activities, on track to go into solvent liquidation in March 2018.