The West Australian Government has been forced into an embarrassing back down on its promise to pay the entitlements of 500 workers affected by the collapse of West Australian coal miner Griffin Coal.
The company, owned by reclusive millionaire Ric Stowe, went into administration on January 3 after failing to make $30 million in tax and debt repayments. Griffin has debts of $700 million, about $530 million of which is owed to US bondholders.
On Monday, West Australian energy minister Peter Collier announced the WA Government would guarantee the entitlements of Griffin’s workers.
But it has now emerged that Premier Colin Barnett has overruled his minister and will not commit taxpayer funds to help the stricken coal miner.
”Being a private company this is a matter for the administrators and the company and there is no government money involved,” he said yesterday.
However, it appears that workers are likely to receive a lifeline, with administrator Brian McMaster of insolvency firm Korda Mentha reporting that there has been a high level of interest in Griffin Coal, with over 20 offers to buy the business flooding in since the collapse was announced.
McMaster has refused to divulge any names, but says his firm has been “overwhelmed by expressions of interest from both domestic and international participants”.
It appears the mining company is viable, although problems in other parts of Ric Stowe’s empire may have put a strain on Griffin Coal.
The first creditors meeting will be held in Perth on January 13.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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