Advertisement

Penrice quarry sold to Adelaide Brighton

Jul 23, 2014

Adelaide Brighton Ltd has swooped on embattled chemicals manufacturer Penrice’s only substantially valuable asset – a limestone quarry at Angaston – securing jobs in the Barossa Valley town.

Administrators of Penrice Soda Holdings Ltd and Penrice Soda Products Pty Ltd, McGrathNicol, today announced it had reached agreement with Adelaide Brighton on the sale of the quarry.

Neither party would disclose a price, but InDaily understands it still leaves creditors well short of the money needed to satisfy almost $200 million in debts.

InDaily understands Adelaide Brighton had made a bid previously for the quarry at around $30 million before Penrice went into administration, but at the time Penrice wanted $60 million.

Those familiar with the sale told InDaily that in the current circumstances, Adelaide Brighton would have picked up the asset for far less than its original bid.

The sale, which is expected to conclude on July 30, will see the quarry transferred to Adelaide Brighton on a going-concern basis.

McGrathNicol partner Sam Davies said the agreement was a great outcome for employees of the quarry and the local Angaston community.

“In selling the quarry as an ongoing concern, we have preserved a significant number of local jobs.

“We look forward now to working with Adelaide Brighton to finalise the terms of the sale ahead of completion next week,” he said.

McGrathNicol will issue its Report to Creditors tomorrow (July 24), and has confirmed the second Creditors’ Meeting will be held in Adelaide on July 31.

Penrice was placed into voluntary administration on April 11.

The second Creditors’ Meeting will determine the outcome of the administration of the Penrice group.

The company hasn’t made a profit for years. It owns an ageing processing plant at Osborne, one of the oldest chemicals manufacturing sites in the state, on the edge of the Port River. Penrice’s only valuable asset was the Angaston quarry.

Penrice has been manufacturing chemicals at the Osborne site since the mid-1930s, originally under the name of its first owner ICI. It was carved off and re-badged as Penrice in 2008.

Penrice owes its banks (NAB and Westpac) $111 million. There are other private financiers owed millions on top of that. Unsecured creditors are owed $14 million.

Employee entitlements for Penrice’s 180 workers total $4.5 million.

Transport companies, utilities and others are also owed money. Scott’s Transport Industries says it is owed $1.43 million, energy distributor Envestra put in a claim for $56,100 and Momentum Energy for $648,000.

Ridley Corporation, which owns the salt pans that had been an essential component of soda ash manufacturing before Penrice closed down that part of its business, says its losses from frustrated contracts will amount to more than $27 million.

With the quarry sold for around $20 million, there’s not much left to go around.

 

Local News Matters
Advertisement
Copyright © 2024 InDaily.
All rights reserved.