Lanco Rebuffs Griffin Liquidation Concern With Vow to Keep UnitRajesh Kumar Singh and David Stringer
Lanco Infratech Ltd., an Indian power company, expects to avoid closing its Australian mining business even as the unit faces liquidation proceedings for unpaid tax.
“No winding-up order has been issued” against Griffin Coal Mining, A. Narasimhan, a spokesman for Lanco, said in an e-mail. “We are confident that there is no basis for winding up and that the matter with the Australian Taxation Office will be resolved as soon as possible.”
The tax office has applied to a court in Perth to appoint a liquidator, according to the Australian Financial Review, which said Lanco has yet to file a defense. Griffin is among mining companies including Anglo American Plc and Glencore Xstrata Plc to suffer from rising costs and slumping coal prices in Australia as demand weakens.
The Lanco unit, acquired by the New Delhi-based utility for A$730 million ($669 million) in 2011, has delayed pension payments to workers after reporting losses, according to the CFMEU labor union. It also deferred payments to supplier Dyno Nobel Pty. Ltd., which has halted deliveries of explosives used in mines, the CFMEU said.
“Without the supply of explosives, it limits our ability to produce coal, and that’s where we get our cash flow from,” Gary Wood, the union’s Western Australian district secretary, said by phone.
Lanco’s Narasimhan declined to comment on payment delays to employees and vendors.
Power-station coal prices at Australia’s Newcastle port, an Asian benchmark, were $77.75 a metric ton for the week ended June 28, declining almost 12 percent in the past year, according to data compiled by Bloomberg.
Griffin posted a loss before interest, tax, depreciation and amortization of 1.05 billion rupees ($17.4 million) in the year through March, almost double the loss a year earlier, according to a May statement. Annual coal production from its mines in Western Australia’s Collie Basin totals 3.1 million tons and is due to reach 5 million tons by next March.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.