MinRes boss Chris Ellison in court as move give McGrath Nicol the boot from Alita begins
Chris Ellison’s MinRes says its takeover play Alita Resources has $100m in cash and shouldn’t be forking out fees to liquidators.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
Mineral Resources, the lithium giant controlled by Chris Ellison, has taken McGrath Nicol to court to seek to have the liquidator fired from its role at lithium miner Alita Resources.
It also wants to call a meeting of shareholders to install new board members including Mr Ellison.
On Tuesday, Western Australia Supreme Court judge Justice Jenni Hill adjourned the matter until next month.
When MinRes managed to clinch a deal with McGrath Nicol to buy part of Alita and all of its Bald Hill lithium mine without any rival bidders getting access to the books, it had seemed the two firms had a tight relationship.
However, MinRes’ court action arguing McGrath Nicol’s role as liquidator for Alita Resources was redundant because of the amount of cash the Western Australia-based company has in the bank.
“Alita Resources has circa $100m in cash. There is no longer a need for liquidators who are charging significant fees for their services,” a MinRes spokesman said.
“The affairs of the company can be managed by a newly constituted board.”
Through a series of structures, Alita had Australia’s only in-production lithium mines, Bald Hill.
It was placed in administration in 2019 when prices for the commodity slumped, and since then McGrath Nicol – while acting as administrator – had been in protracted arrangements to sell the company to a China-connected company which it installed to run its Bald Hill mine and which subsequently sold its lithium at dramatically below-market rates.
That bid by the China-connected company, Austroid Holdings (and an earlier one by related company CHEL) was knocked back by the Foreign Investment Review Board, and subsequently McGrath Nicol sold a stake in Alita to MinRes.
Lithium is a key commodity needed for the electrification of the world and a component in batteries for electric vehicles (EV), mobile phones, and solar power backup storage.
As more countries have signed up for net zero targets, prices for lithium have tripled over four years but have fallen this past year on fears of a slowdown in EV sales in China.
McGrath Nicol has said it was taken by surprise by MinRes’s attempt to remove it and said in a statement to Alita shareholders that the dual listed entity – listed in both Australia and Singapore – was still in debt.
McGrath Nicol said companies associated with Alita owed the Australian Taxation Office about $203m.
That could potentially have made the ATO the biggest creditor in Alita, ahead of Austroid, which had agreed to the MinRes deal.
“The liquidators received a letter enclosing a formal proof of debt from the ATO in the amount $203,045,626.28 which states that Alita still is, justly, truly and contingently indebted to the deputy commissioner of taxation for income tax,” McGrath Nicol said in a statement. “Tax consultants have been engaged to prepare and finalise the Alita Group’s
income tax returns for FY23 and FY24. The FY24 tax returns will also include an assessment of the tax payable following the sale of Alita’s shares in Tawana.”
Alita was delisted from the ASX, but its shares remain on hold in Singapore.
A MinRes spokesman said its proposed move would allow shareholders – including in the ASX-listed entity – to “vote on the directors and have a say on the future affairs of the company”.
“MinRes supports control reverting to a newly constituted board of directors who have been approved by shareholders and who will be accountable to the shareholders,” the spokesman said.
McGrath Nicol has previously come under scrutiny for not opening the books of Alita to other potential bidders and instead selling Bald Hill to MinRes for about $260m plus the 9.9 per cent shareholding in Alita.
As The Australian revealed earlier this year, Glencore and Sagex Capital had made a non-binding offer to buy the company’s debt and relist it for as much as $1.8bn.
More Coverage
Originally published as MinRes boss Chris Ellison in court as move give McGrath Nicol the boot from Alita begins
‘Alarming trends’: Why this carmaker dumped EVs
Ineos Automotive – the carmaker which says it gave a home to 4WD ‘refugees’ – reveals why it has parked EVs and how it plans to win customers with big diesel and petrol engines.
Search for new QBCC comissioner rolls on
A bit over a month after QBCC commissioner Anissa Levy was told she no longer had a job the search continues for someone to run the building regulator.