15 Dec 2010

Insurance policy now mine company's main asset

9:57 am on 15 December 2010

The receiver of Pike River Coal says the company's main asset is now its insurance policy, and there's still no word on when, or if, it will be paid out.

Twenty-nine workers died in series of explosions in the mine that began on 19 November.

All production has stopped, the company was placed into receivership on Monday and on Tuesday 114 staff were made redundant.

Staff have been told there's enough money left to cover their statutory entitlements, but a question mark hangs over other creditors, including local contractors, who are owed more than $10 million.

The cash-strapped miner also owes its largest shareholder, New Zealand Oil and Gas, $64 million and the BNZ about $23 million.

Receiver John Fisk of PricewaterhouseCoopers says the company has about $9 million dollars in the bank at the moment, but there's a significant cost in maintaining the business.

The main asset is an insurance policy which could be worth up to $100 million, he says, but the receivers have yet to establish whether there will be any argument from the insurer over the claim.

Mr Fisk says some of the company's staff and management will be offered contracts to help the receivers take control of the business.

Contractor's widow 'forced to fight for payment'

The widow of a contractor who was among the 29 men killed at West Coast mine says she is now being forced to fight for the money she's owed.

Contractors are regarded as unsecured creditors, and Milton Osborne's widow Anna Osborne says it's unfair they won't get paid for work they did before the explosions.

"My husband, he has worked 15-hour days, he has slogged his guts out to try and help Pike, get them out of the position they're in.

"In the end it took my husband's life, took his two employees with him and we now will probably not get paid for the work that they did to try and help Pike out."

NZ Oil and Gas contributed $12m

New Zealand Oil and Gas, the major stakeholder in Pike River, has has issued a statement saying that after the first explosion on 19 of November, it advanced $12 million to Pike River Coal so that it could concentrate on the

rescue mission without worrying about its existing financial problems.

The statement goes on to say that the $9 million dollars found by the receivers in Pike's accounts is what is left of that $12 million.

New Zealand Oil and Gas says it wasn't obliged to contribute, but without it advancing the money, there would have been nothing with which to pay the Pike River employees.

It says the wages and redundancy payments announced on Tuesday will be paid with NZOG money.