Pike coal-handling assets bid not anti-competitive, says Solid Energy

Thursday 20th October 2011

Solid Energy says a High Court decision overturning its gaining of leases for coal-handling facilities built for the Pike River mine was “pretty even-handed” and did not support the receivers’ view that its actions were anti-competitive.

In his judgment, reported earlier this week by BusinessDesk, Judge Joe Williams concluded that losing access to land on which it had built coal-handling facilities would reduce competition for the whole of the Pike River operation, which receivers are attempting to sell.

“I am well satisfied that Ikamatua is a core strategic asset to Pike River and that its loss … would materially devalue Pike River as an integrated operation,” Judge Williams said.

The two landowners who had signed leases with Pike River for the site of the $10.5 million coal-handling facility at Ikamatua, near Greymouth, cancelled them earlier this year and immediately reassigned the leases to Solid Energy.

Solid Energy offered up to $80,000 to each landowner to reassign the 25-year leases, which attract annual rents of $78,000. Each landowner received $15,000 at the time of the reassignment, with another $65,000 to be paid once there was “no longer any realistic chance of relief against cancellation.”

The High Court judgment, however, has granted that relief.

The Pike receivers, accounting firm PwC, claimed in court the loss of access to the Ikamatua facility would “hamper their attempts to sell, and reduce Pike River’s value if a sale is completed.”

However, Solid Energy chief operating officer Barry Bragg said Judge Williams’s decision does not support those allegations “in any way.”

“In fact, the judge says that Pike River in receivership must offer Solid Energy the lease for two years at the same terms. Our view is that the decision is pretty even-handed, we are satisfied with it and will be requiring the receivers to enter into the sub-lease with us.”

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

No comments yet