ANZ digs in for Oswal fight
ANZ digs in for Oswal fight

ANZ Bank expects its legal fight with former Burrup Fertiliser owner Pankaj Oswal to last "for years", but has moved to shield the plant's new owners Apache Energy and Yara International from further claims by the fallen tycoon.

In the first public confirmation of the legal shield, ANZ Banking Group chief executive Mike Smith defended granting Apache and Yara indemnity from future action.

He said it was a necessary part of the complex bid to rid the bank of its troubled $860 million exposure to the business, now Yara Pilbara.

"This is one of those legacy assets that we had to deal with," Mr Smith told _WestBusiness _.

"It was incredibly complex. What we had to do was find the best commercial resolution to the issue and at the end of the day that's what happened and certainly the plant continues to be a going concern and we continue to finance it.

"That (legal) story I suspect has many years to run. It was all part of the whole work-out."

Mr Smith's preparedness to dig in for a protracted battle against claims running into the hundreds of millions, comes as Mr Oswal moved a step closer to ensnaring Apache Energy's US parent in his two-year-old legal web.

He secured a significant victory in a Houston court that could see Apache Corporation forced to open its books, in a separate case that will not be covered by ANZ's indemnity.

Mr Oswal claims Apache, and its parent Apache Corporation, misled him when he signed a 25-year gas sales agreement which feeds Burrup's fertiliser plant that lasted for only five after Apache claimed its original source field would run out of gas.

He says this caused him to unnecessarily sink up to $US491 million ($474 million) into Burrup.

The original 25-year GSA, which underpinned Burrup's profits, was based on a gas price starting at 96ยข a gigajoule. The new price is understood to be about $5/gigajoule. It was renegotiated as part of the $US582 million sale of Burrup to Apache and Yara in February.

ANZ appointed receivers to Burrup in 2010 amid claims of financial irregularities. About $300 million of ANZ debt remained in the business.

Mr Oswal has convinced the Harris County court to hear whether the matter should be held in Texas, and what matters should be covered under any discovery process.

An Apache spokesman played down the development. "The stay has been lifted only partially and only for the limited purpose of considering motions by Apache Corporation that Texas is not the proper forum for this dispute," he said.

The West Australian

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