Griffin Coal Mine in Australia is no longer a Lanco Group company as the ICICI-led lenders took over the pledged shares as a result of default of payment, a senior official of the debt-ridden Indian infra firm said. Lenders of Lanco Resources International Pte Limited (LRIPL), a Lanco Infratech subsidiary, which owns Griffin Coal Mine, have earlier appointed PWC as receiver and manager to look for an investor as the Aussie company defaulted payment.
“Griffin Coal is no longer our subsidiary. The total debt of the entity was close to USD 900 million. We are not showing its (Griffin Coal) results also in our financial reports. The total loss incurred by the group on account of Griffin Coal would be USD 300 million,” T Adi Babu, chief operating officer-finance, Lanco Infratech told PTI.
Lanco Infratech, through its Australian subsidiary, acquired Griffin Coal Mining Company and Carpenter Mine Management for AUD 740 million in March 2011.
Though the transfer of shares was to have legal title on the shares to the lenders, the beneficial interest continued to be with with the company, as part of “perfection” of security under the Singapore laws, Lanco had earlier said.
The sale process of Griffin Coal in 2011 was overseen by Kodramentha- administrator of Carpenter Mine. The Australian mine is continuously making cash losses ever since its acquisition.
Production at the mine during the FY17 was 2.50 million tonnes with sales of 2.45 MT. Production was less than optimal as the fall in international coal prices did not economically justify exporting a part of the production.
In 2015, Lanco alleged that Kordanentha misled the bidders by withholding two reports suggesting the Griffin coal deposits were smaller than disclosed first. Denying Lanco’s allegation, Kordamentha in turn made a counter allegation that Lanco defaulted its instalment to the tune of USD 150 for the mine.
Adi Babu said the issue has been settled out of court as the Australian advisory and investment firm agreed to pay about USD 10 million as expenses and also waive USD 150 million payment instalment by Lanco.
“The case was settled. We were to pay USD 150 million. (as part of the settlement). We dont have to pay that amount. It was waived. The advantage of the settlement will also go to the bank (lenders). They have also agreed to pay about USD 10 million towards damages,” Adi Babu said.
Lanco Infratech currently is under insolvency proceedings and on August 7, National Company Law Tribunal (NCLT) suspending the powers of the Board, appointed Savan Godiawala as Interim Resolution Professional (IRP) as part of the Corporate Insolvency Resolution Process (CIRP) for the company.