The publicly-listed company reported to the Australian Securities Exchange (ASX) this morning it had now received $20 million in progress payments as it continues to weigh its options for rebuilding the business.
The statement said the balance of the company’s $60 million claim was being progressed by the insurer and further details would be released once the claim has been finalised.
Its policy with insurer Primacy Underwriting Management Pty Ltd has a limit of claims of $65 million.
In its March update last month, Kangaroo Island Plantation Timbers’ said its $60 million tree crop insurance was “virtually certain”.
The update said the additional $5 million may also be recoverable but the policy wording was “ambiguous and internally contradictory regarding interaction of excess(es) and policy annual limit”.
The company will use the funds to reduce its Commonwealth Bank loan balance to $7.5 million to minimise future finance costs.
The first $10 million payment was made in February.
At the time, KIPT managing director Keith Lamb said the company faced a massive salvage operation to monetise the fire-affected timber, as it continued argue for a deep-sea port on the island.
Lamb said building the port was the best option to deal with the timber, warning that without it, the company would have to fell and burn much of what remains – which would emit huge quantities of carbon dioxide – or using barges to take the timber off the island; a process that could take 20 years to complete.
He estimated the earliest possible timeline to get the necessary approvals for a port, and build it, at 12-to-18 months.
Concern about the environmental impact of the port includes its potential impact on Kangaroo Island’s abalone industry.
KIPT was ranked 46th in InDaily’s SA Business Index annual listing of South Australia’s top 100 businesses in 2019.
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