Indonesian Court approves Straits plan
PERTH (miningweekly.com) – The Indonesian Commercial Court has approved a settlement plan put forth by a subsidiary of ASX-listed Straits Resources.
In January this year, the Indonesian arm of Straits, and the owner of the Mt Muro gold project, declared voluntary bankruptcy, after PT Indo Muro Kencane (PT IMK) failed to secure a buyer for the project.
The Mt Muro operations were shut after PT IMK failed to progress the mine to a cash positive status. The team had implemented a number of positive measures, including the redesign of the mine plan to reduce waste movements without affecting gold production.
However, a number of unforeseen challenges had impacted on the timing of the Mt Muro project becoming cash-flow positive, including the falling gold price and the impact of illegal miners.
The Court-approved settlement plan now gave ownership of PT IMK to its creditors, while the Straits subsidiaries that hold all the shares in PT IMK would be transferred to a special purpose vehicle that would be held in trust on behalf of the creditors.
This process would likely be completed within two weeks, after which Straits and its subsidiaries would have no ongoing obligations to either the creditors or the entities that held shares in PT IMK.
“This is a significant outcome for both Straits and the creditors of PT IMK and is the result of more than eight months of discussion and negotiation among Straits, PT IMK, the administrator and the creditors,” said Straits executive chairperson Andre Labuschagne.
“The implementation of the settlement plan is another key deliverable achieved in the ongoing turnaround of Straits and now enables Straits to focus solely on maximising value from its Australian assets, particularly the Tritton copper operations, in New South Wales."
The finalisation of the settlement plan overrides the voluntary bankruptcy.
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