We worked with the receivers and managers to implement a transaction to restructure the company. This resulted in the continuation of the mine's operations, securing the continued employment of its employees.
Altura Mining Limited (AJM) was an ASX-listed lithium miner with its main investment in mining operations and exploration activities in the Altura Lithium Project. Altura Lithium Operations Pty Ltd (ALO) was a wholly owned subsidiary of AJM and its primary business was the operation of the Altura Lithium Project (owned by ALO).
The Altura Lithium Project, a hard-rock lithium operation, located at Pilgangoora in Western Australia, approximately 123km from the town of Port Hedland, Western Australia, began production in 2018, employing about 100 fly-in fly-out workers. Australia is considered the world’s top producer of lithium and has the second-largest reserves in the world. With the push towards clean energy, the lithium mine was primed to play a key role for Australia as it pursued its transition to clean energy.
To capitalise on the increased demand for lithium, several decisions were made that caused a major financial impact on the mine. Ultimately, Altura entered voluntary administration at the end of October 2020 on the back of a low-price environment fuelled by COVID-19, in addition to a series of other issues plaguing the mine.
Since beginning production in 2018, the mine was beset with a multitude of issues. Several issues resulted in the ALO experiencing severe financial difficulties.
The mine was placed in ‘care and maintenance’, at which time Cor Cordis was appointed as voluntary administrators, along with KordaMentha as receivers and managers.
Beset with significant financial burden, the challenge for Cor Cordis as administrator, was to assess whether there was any likelihood of delivering a positive outcome for its stakeholders.
Following our appointment, we worked closely with the receivers and managers to implement a transaction to restructure ALO.
This process involved restructuring or repaying approx. $250m in secured debt and approximately $45m in non-related unsecured debt.
The repayment of this debt, meant that Pilbara Minerals Limited was able to purchase the mine without any outstanding debt owing (apart from certain limited circumstances), plus acquire the Lithium project asset.
The sale of Altura was completed three months after our appointment. The ability to turn this around so quickly ensured that the livelihood of the mine and its employees was realised in a relatively short period of time, considering the extent of the issues involved.
The transaction resulted in the continuation of the mine’s operations and importantly secured the continued employment of the mine’s employees.
Furthermore, in addition to restructuring the outstanding debt, in our role as administrators of AJM, we underwent a further sale and restructure campaign.
All unsecured creditors received 100 cents in the dollar and the control of the company was returned to the directors, ensuring continuity of business and employment of its employees.
This restructure facilitated the opportunity for the directors to relist the company, changing its name to Morella Corporation Limited, with all shareholders retaining their shareholdings.