Oz Mining says CuDeco Limited’s Chinese investors/owners are selling the company to themselves under a new entity while receivers and administrators struggle to get paid.
Oz Mining was the primary mining contractor at CuDeco from September 2017 and is owed $35 million, with $29.6 million recognised by the administrator and they have been closely involved with the sale process.
Oz Mining CEO Andrew Theobald said he worked with fellow contractors ValueStone, China Tonghai and Noble Resources, towards a Deed of Company Arrangement.
“We were going to invest $20 million, with a foreign investor to contribute $40 million to get CuDeco back up and operating, but the investment side fell over in late 2019,” Mr Theobald said.
“At that point we thought we would try and raise the money and buy the project ourselves. We worked with the receivers and their advisers on putting an offer together to purchase the assets of the company so it would ultimately be an all Australian owned and operated business.”
Mr Theobald said an Australian offer was submitted in May which included upfront cash, a large share of earnings in the first year and a royalty style arrangement for the remainder of the mine life totalling up to $60 million, going back to the creditors. But seemed the Australians were outbid by a Chinese/ Malaysian consortium.
The Chinese investors behind CuDeco had also placed a bid for the company under a new entity called Copper Resources Australia Pty Ltd, which the Australian Securities Investment Commission lists as an Australian company owned by Malaysian interests with the ultimate holding (parent) company Dragon Field International based in Hong Kong.
“We knew we were always battling to get the sale, because the previous Chinese investors, who were funding the receivers, also put in an offer,” Mr Theobald said.
“It became a very conflicted and no-win situation for any other bidder, where they are the ones making all the decisions. We are putting in an offer to the receiver that passes it to the same Chinese parties to accept, who are also bidding.
“The Australian offer totalled $60 million and the offer that beat us was from Copper Resources Australia and rumoured to be around $29 million. We understood that they were the ones making the decisions, so how were we ever going to get them to accept an offer that isn’t their own.”
Mr Theobald said the Chinese investors were playing games and holding back on paying the receivers and advisors who needed to conduct the necessary care and maintenance activities of the site and company.
“It’s a very bad situation where the Chinese investors were largely threatening the advisers and receivers through lack of receivership funding.
“The liquidators had no control over any of the funds, and was then forced into a position where they had to ‘Disclaim the Property’ through liability concerns which effectively means the property resides with the State of Queensland.”
The process now requires a court decision with the first Case Management Hearing being held in the Federal Court in Perth, Western Australia on Thursday August 6, 2020.
“Should the Chinese and other investors get the decision they hope for, the Federal Court will then rule that the liquidators have to resume liability for CuDeco until the sale is completed. Once that happens, usually they would then apply to the Foreign Investment Review Board seeking approval, which we understand has already been given,” Mr Theobald said.
“At this point it’s the only time that the sale of CuDeco could possibly be stopped.
“It is very disheartening to think the same Chinese connections who sent the business broke with over $200 million owing have screwed everyone over and now they are going to obtain complete ownership of it. They get a second crack at potentially doing the same thing again and that’s a massive concern for me as it should be for all Queenslanders.”
CuDeco receivers were contacted for a statement and said “at the present time we are not in a position to comment.”