Singapore 12/04/2016 - FTI Consulting, the administrator of Queensland Nickel (QNI) has recommended in a report on Tuesday that the 30,000-35,000 tonnes per year nickel refinery in Yabulu in Australia’s Queensland be wounded up when creditors vote at a meeting next Friday.
“It is clear at this stage that the company has a deficiency of assets to liabilities and further that it is insolvent, in that it cannot meet its debts as and when they fall due,” said FTI. Winding up the company will allow liquidators to realise the company’s remaining assets for the benefit of creditors, it said.
QNI has been insolvent since November last year and owes creditors - including employees redundancies - close to A$300 million ($229 million), according to FTI’s 124-page report.
The refinery has been shut since late February - and possibly remaining so at least till July - after majority of employees were sacked in March.
FTI noted that prior to its appointment as administrator in January, low nickel price over the past year and reduction of QNI’s working capital resulted in operating difficulties at the refinery. The refinery was operating with limited quantities of nickel ore, with lapses in maintenance and safety environmental performances, it said.
The report also criticised QNI owner and politician Clive Palmer and QNI director Clive Mensink for being “reckless” in exercising their duties and powers as directors of the company.
Funds from QNI had been used to purchase vintage cars for Palmer’s museum and a hotel, in donations to Palmer’s political party and transferred to entities and Palmer under Palmer’s instructions, causing “significant detriment” to the QNI, FTI said.