Bowen Coking Coal suspends trading after receiving $15m debt demand
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The news: Embattled coal miner Bowen Coking Coal has been voluntarily suspended from trading on the ASX as it struggles to pay a debt demand from mining service provider BUMA Australia, the former operator of Bowen’s Burton Mine Complex.
The numbers: BUMA Australia is demanding that Bowen Coking Coal pay invoices totalling just under $15.3 million by midday 16 July.
Prior to entering a trading halt around 12:51pm AEST, stocks in the metallurgical coal producer had fallen 25% to $0.075.
The context: Bowen has faced financial difficulties amid what it previously described as “depressed coal markets” and “unsustainable” Queensland government royalty fees. It took over management of the Burton Mine Complex from 1 July after its contract with BUMA expired.
Prior to receiving the payment demand, Bowen had been negotiating with BUMA and its senior secured lender Taurus on payment deferment or alternative arrangements. The company had also been in discussions with the Queensland Revenue Office.
The coal company said in its voluntary suspension request that continued trading of its stocks “is likely to be materially prejudicial to finalisation” of a proposed debt restructure agreement that includes cash and non-cash components of consideration to BUMA.
What they said: “The company is currently not in a position to fully pay the amount of the Demand while also continuing to meet its other payment obligations as and when they fall due and hence, wishes to continue seeking an agreement with BUMA acceptable to all stakeholders,” the suspension request said.
