Atlantic lifts white flag at Windimurra
The curse of Windimurra has struck again, with Atlantic calling in administrators to the vanadium mine's operating subsidiaries after bondholders and its major shareholder failed to agree on a rescue package.
Atlantic said it had called in Ferrier Hodgson to reprise their 2009 role as administrators of the mine. The debt is owed by Atlantic subsidiary Midwest Vanadium and Ferrier Hodgson will act as administrators to Midwest and a second Atlantic subsidiary, Atlantic Vanadium Holdings.
It took the step after negotiations broke down between Indonesian billionaire Anthony Salim's Droxford International, its major shareholder and substantial creditor, and the holders of $US335 million ($431 million) worth of senior secured notes over a restructuring package.
The company said its noteholders had appointed McGrathNicol as receivers and managers of the two subsidiaries.
Atlantic said it was not affected by the decision, and had $13.5 million in cash at the end of January.
The negotiations have been ongoing since February last year, after a fire ripped through the mine's beneficiation plant, forcing Atlantic to mothball the already-struggling operation.
Although the company's insurer had agreed to payouts of about $100 million to rebuild the plant, Atlantic has previously said it was in breach of the covenants on the secured notes, and on its lending agreements with Droxford, and was reliant on the forbearance of its lenders.
Atlantic is the latest in a long line of companies to fall victim to the Windimurra vanadium project, which has shredded reputations and burned hundreds of millions of dollars over its troubled history.
Swiss mining giant Xstrata, now part of Glencore, and Roderick Smith's Precious Metals Australia drove its initial development in the late 1990s, spending $180 million to build what was then touted as the most advanced vanadium plant in the world.
That plant was torn down only a few years later after Xstrata mothballed Windimurra in 2003 due to softening commodity prices.
In 2005, PMA regained control of the project and, after re-badging itself as Windimurra Vanadium, spent more than $100 million rebuilding the plant, only to go bust in 2009 while it was only 90 per cent complete.
Michael Minosora spearheaded its return to production, picking up the asset from the ashes of Windimurra Vanadium in late 2009. Production resumed in 2012.
