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Updated at 7:31 pm on 12 September 2011
Hundreds of sub-contractors who worked for the Pike River Coal company will receive early payments under an agreement over an insurance payout.
Twenty-nine men were killed at the West Coast mine in explosions from 19 November last year. The company was put into receivership the following month.
At the time, the coal company had insurance worth $100 million and its insurers have now agreed a full and final settlement of $80 million.
About $6 million will be paid to the owners of leased mining equipment, with the remainder going towards Pike River Coal's debts.
The BNZ will be paid the $23 million it is owed in full. New Zealand Oil and Gas (NZOG) as the other first ranking creditor and the mine's major shareholder has priority over the rest of the money.
However NZOG chief executive David Salisbury says the company supports the receivers using some of the insurance payout to make a voluntary early payment to unsecured creditors.
New Zealand Oil and Gas shares ended Monday's trade up 3 cents to 71 cents in the wake of the announcement.
As part of proposed payment arrangements, unsecured creditors will be paid the first $10,000 of their claim then 20 cents in the dollar for any amount above that, up to a cap of $10.5 million.
That should mean 243 creditors will be paid in full and 222 will receive a part payment. They will still be entitled to claim for the full remaining balance once the mine is sold.
John Fisk from receivers PricewaterhouseCoopers says payments will be made in October.
NZOG expects to receive around $41 million and to still be owed nearly $27 million.
Peter Haddock, of the Pike River Contractor's and Suppliers Group, has welcomed the agreement.
He told Checkpoint that although small, the payment will help a lot of the smaller businesses.
Copyright © 2011, Radio New Zealand
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