Bowen Coking Coal must pay $6.8m or face deemed insolvency
Make us a preferred source
Make us a preferred source on Google
The news: Mining services provider BUMA Australia issued a creditor’s statutory demand to Bowen Coking Coal on Wednesday that will trigger a deemed insolvency event if not paid.
The numbers: BUMA, whose contract for operating Bowen’s Burton Mine Complex ended on 30 June, initially demanded payment of $15.3 million by midday 16 July.
BUMA then issued Bowen with a creditor’s statutory demand for $6.8 million of the $15.3 million on 16 July.
The lower amount “takes into account liquidated damages claimed by [Bowen] against BUMA which are the subject of ongoing dispute”, Bowen’s statement to the exchange reads.
The context: Under the corporations act, Bowen must pay the amount demanded within 21 days of the statutory demand or a deemed insolvency event will occur.
This enables BUMA to file a court application for Bowen to be wound up unless the company files an application for the demand to be set aside within the payment period. An insolvency event would constitute a breach of Bowen’s debt facility agreements.
The metallurgical coal producer has been facing financial headwinds amid what it previously described as “depressed coal markets” and “unsustainable” Queensland government royalty fees.
What they said: “BCB is considering its position, but remains committed to seeking a commercial resolution of BUMA's claims and to this end, is actively engaging with BUMA, although no agreement has been reached yet,” Bowen’s statement to the exchange reads.
The source: ASX
