Griffin Coal Mine No Longer A Subsidiary Of Lanco

Griffin Coal Mine in Australia is no longer a Lanco Group company as the ICICI Bank-led lenders took over the pledged shares as a result of default of payment, a senior official of the debt-ridden Indian infrastructure firm said.

Lenders of Lanco Resources International Pte Ltd. (LRIPL), a Lanco Infratech subsidiary, which owns Griffin Coal Mine, have earlier appointed PWC as receiver and manager to look for an investor as the Aussie company defaulted payment.

Lanco Infratech, through its Australian subsidiary, acquired Griffin Coal Mining Company and Carpenter Mine Management for A$740 million in March 2011.

Though the transfer of shares was to have legal title on the shares to the lenders, the beneficial interest continued to be with with the company, as part of "perfection" of security under the Singapore laws, Lanco had earlier said.

The sale process of Griffin Coal in 2011 was overseen by Kodramentha - administrator of Carpenter Mine. The Australian mine is continuously making cash losses ever since its acquisition.

Production at the mine during financial year 2016-17 was 2.50 million tonnes with sales of 2.45 million tonnes. Production was less than optimal as the fall in international coal prices did not economically justify exporting a part of the production.

In 2015, Lanco alleged that Kordanentha misled the bidders by withholding two reports suggesting the Griffin coal deposits were smaller than disclosed first. Denying Lanco's allegation, Kordamentha in turn made a counter allegation that Lanco defaulted its instalment to the tune of $150 million for the mine.

Adi Babu said the issue has been settled out of court as the Australian advisory and investment firm agreed to pay about $10 million as expenses and also waive $150 million payment instalment by Lanco.

"The case was settled. We were to pay $150 million (as part of the settlement). We don’t have to pay that amount. It was waived. The advantage of the settlement will also go to the bank (lenders). They have also agreed to pay about $10 million towards damages," Adi Babu said.

Lanco Infratech currently is under insolvency proceedings and on Aug. 7, the National Company Law Tribunal (NCLT) suspending the powers of the Board, appointed Savan Godiawala as Interim Resolution Professional (IRP) as part of the Corporate Insolvency Resolution Process (CIRP) for the company.