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Note 34: Subsequent Events

The following significant policy decisions and events occurred after 30 June 2015 and prior to the financial statements being signed. No adjustments have been made to these financial statements. The nature and estimated financial commitment (where known) is noted below.

Solid Energy New Zealand

On 13 August 2015 the Board of Solid Energy New Zealand Limited placed that company and all associated companies into voluntary administration. Subsequently, on 17 September 2015, a Deed of Company Arrangement (DOCA) was approved by creditors that will allow the company to continue to trade while it undertakes an orderly, managed sale of its assets over the next two-and-a-half years.

Under the DOCA:

  • Solid Energy will engage an investment bank and undertake an orderly, managed sale of its assets over the next two-and-a-half years.
  • The existing Board will continue to govern Solid Energy, and be monitored by and report to the Deed Administrators and a monitoring committee of certain creditors.
  • Solid Energy's debt will be restructured and divided into two tranches.
  • All costs incurred in the normal course of ongoing trading will be paid when they fall due and rank ahead of all other debt.
  • Existing Crown indemnities for site rehabilitation costs will be restructured to provide certainty for future mine owners and affected local authorities and assist the asset sale process.
  • Participant creditors get what's left at the end, after payment of all trade creditors and employees, as settlement of their debt. If the proceeds are less than the outstanding debt, the participant creditors release the shortfall.
  • If any assets cannot reasonably be sold they will be put into a safe and secure state, all employee entitlements will be fully met, and the asset will be disclaimed.

The Crown will continue to take responsibility for site rehabilitation costs associated with Solid Energy's activity as detailed in the Deed of Indemnity. On execution of the DOCA, existing Crown indemnities were restructured by extinguishing the existing indemnities and providing new indemnities on a mine by mine basis. The value of these new indemnities has been made transferrable to future mine owners by permitting them to be 'cashed out' to an escrow agent prior to sale. The escrow agent will hold the funds and reimburse certified rehabilitation work carried out by future owners. Local authorities have also been given direct access to claim against the new indemnities (once cash out has occurred) in the event of non-performance of mine owners obligations.

These financial statements reflect the assumption that there is no residual value in Solid Energy for the Crown. Therefore, with the exception of site rehabilitation obligations which have been indemnified by the Crown, the net assets of Solid Energy have been valued at nil by adjusting the asset value to agree to the value of Solid Energy's liabilities.

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