Pike River receivers to continue efforts to sell mine

6:51 am on 15 April 2011

The receivers of Pike River Coal Ltd say they will continue trying to sell the West Coast mine despite moves to put the company into liquidation.

Twenty-nine miners and contractors were killed after a series of explosions which began on 19 November last year in the mine near Greymouth.

Pike River Coal was placed in receivership to PricewaterhouseCoopers in December, leaving 43 unsecured contractors with $5 million in unpaid bills.

The receivers say the company still has value and spokesperson John Fisk says their work to sell it will continue.

Radio New Zealand understands the sealed-off coal mine could be advertised in trade papers and possibly newspapers as early as next week.

A price of at least $75 million has been mentioned in preliminary discussions. The receiver hopes the process will be over by August this year.

Despite this, the 43 unsecured creditors are pressing ahead with plans to put the entire company into liquidation.

Their lawyer says this would give unsecured creditors the chance to put the whole process under scrutiny.

A spokesperson for the contractors, Peter Haddock, says they have held back on liquidation as long as there was a realistic prospect of recovering the men's bodies.

However, Mr Haddock says they are proceeding with the action in the face of PricewaterhouseCoopers failing to mount a recovery operation and indications that the receivers will not participate fully in the Royal Commission into the disaster later this year.

Mr Haddock says contractors have been told there is little chance they will be paid and liquidation may result in a early sale to a suitable buyer.

"We believe it will lead to an early sale of the mine and hopefully that will speed the process up and that will lead to, hopefully, the recovery of bodies if possible and payment of our debts," he told Morning Report.

Contractors' move 'misguided'

The largest creditor of Pike River Coal says contractors seeking to put the company into liquidation are misguided.

New Zealand Oil and Gas has $52 million in secured debt and $13 million in unsecured debt against the company. It is also the company's largest shareholder.

Corporate affairs manager Chris Roberts says liquidating Pike River Coal is the wrong approach.

He says the firm understands the contractors are hurting from the financial loss but their action will lead only to further delays and complications and more money being spent on lawyers.

Mayor fears halt to recovery work

Grey District mayor Tony Kokshoorn says the receivers have already indicated that they are putting the company up for tender next week.

He fears moves to liquidate the company may put a stop to the recovery of the remains of the men who died.

Mr Kokshoorn told Morning Report he is worried a forced liquidation will put the liquidators and lawyers ahead of the contractors in the queue to be paid - and lead to a halt to recovery work at the mine.

Contractor in receivership

Morris Contractors Ltd, which carried out $58,000 worth of work for Pike River, has gone into receivership.

The Blenheim-based company says the money it was owed was one of the contributing factors, as was the purchase of equipment for contracts which then fell through.

A spokesperson says the company was part of a group seeking to have Pike River liquidated - but withdrew from the action when it went into receivership.