Martin Rasini
THE holding company for the Rocky Point sugar mill’s power plant is expected to be placed in liquidation following the sale of the facility by receivers on Friday.
A creditors meeting is scheduled for today and administrators to the company, Rocky Point Power Project, which is held by US interests, earlier indicated they would recommend the move.
Receivers were appointed to the company in January at the behest of the financier, an arm of Babcock and Brown, and administrators Anne Meagher and Terry Rose, of SV Partners, were put in place the following month.
The receivers Jason Preston, Peter Anderson and William Harris of McGrathNicol, negotiated sale of the Woongoolba facility after offering it in an expression of interest campaign that closed on February 27.
The purchase price has not been disclosed.
Rocky Point Power Project, which traded as Rocky Point Green Power, is understood to owe the financier $6 million and to have a number of $1 million-plus debts to unsecured creditors, including the sugar mill, which is held by the Heck family.
Debts also are owed to the 35 staff of the power generation facility.
One employee said yesterday they had been told there was nothing in the kitty and liquidation of the company would enable them to receive some recompense for debts from the Federal Government’s General Employees Entitlements and Redundancy Scheme.
The staff were handed termination notices following the signing of the contract of sale.
The new owner, First Pacific Capital Underwriters, associated with businessman Eduardo Alcordo, is expected to rehire staff in the wake of its takeover of the plant.
FPCU’s initial task will be to repair, at a multimillion-dollar cost, a boiler that failed in December.
The Woongoolba plant, which burns cane waste to create electricity and began operations in 2003, was built with the help of a $70 million government grant and is widely believed to have sold in the single-digit millions for marginally more than scrap value.
It sits on land leased until at least 2021 from the Heck Group, which utilises power and steam from the plant to process sugar at the nearby mill.
The Heck Group is understood to have contractual arrangements in place that deliver electricity at well below standard commercial prices, without which the sugar mill would not be viable, placing the area’s cane industry at risk.