Callide C sale delayed after go-slow on explosion report and court dates

Deloitte has lost a bid to bring forward the sale of the Callide C power station to state government-owned CS Energy.

Callide C has been out of commission since it was crippled by an explosion three years ago.

Deloitte has lost a bid to bring forward the sale of the Callide C power station to state government-owned CS Energy.

Federal Court judge Roger Derrington on Thursday rejected the application of Deloitte administrator Richard Hughes to allow a meeting of creditors of the collapsed private company that owns half of Callide C, until at least June.

Justice Derrington said that application and another matter, concerning a private investor’s bid to have Deloitte removed as general purpose administrators, should be heard together.

“Part of that application … involves the general purpose administrator’s conduct in relation to circumstances which resulted in the DOCA (deed of company arrangement) being advanced,” Justice Derrington said.

“If that contention is made good … conduct on behalf of the general purpose administrators warrants consideration, the issue will not be ventilated if the general purpose administrator’s application is heard before the application to remove (them).”

Callide C has been out of commission since it was crippled by an explosion three years ago and is now the subject of a sprawling legal battle between Czech investor Sev.en and CS Energy over the causes of the explosion, and a second extraordinary failure in late 2022 involving the collapse of a cooling tower.

Queensland government-owned CS Energy currently owns 50 per of the power station, and is now seeking to buy out the remaining 50 per cent for complete control of the operation.

The other half is currently owned by the privately held Genuity Group – which in turn is 25 per cent-owned by Czech energy investor Sev.en, with China Huaneng Group and Guangdong Energy Group controlling the rest.

Australia’s competition regulator gave the green light for CS Energy to buy the remaining 50 per cent of the power station on Thursday, saying “the proposed acquisition was not likely to substantially lessen competition in any relevant market”.

In late January, Justice Derrington backed Sev.en’s application to appoint FTI Consulting’s John Park and Benjamin Campbell as special purpose administrators to collapsed company IG Power Callide (IGPC), with the powers to investigate an explosion at Callide C in 2021 and the collapse of cooling towers in October 2022.

Earlier on Thursday, lawyers for Deloitte argued views of creditors should be heard before the next court hearing slated for June 18, amid questions about funding for return to services works going on at Callide.

Cash calls are made monthly in respect of costs including the costs of return to services, barrister for Deloitte Adam Pomerenke KC told the court.

He said up to next month, IG Power’s share of the cash call has been met by a subsidiary of CS Energy.

“(The subsidiary) had squarely foreshadowed it would no longer continue to meet cash calls,” he said.

“My client views no option but to pay (IG Power’s) share from existing resources. What has now happened … is that (the) $22m payment has been made from (IG Power’s) existing resources.

“The consequence of that is that $22m which would otherwise have been available to creditors … is no longer available.”

Returns to creditors will diminish and they should have the opportunity to consider whether they want to secure 97c in the dollar. Mr Pomerenke said it could drop to 80c in June.

But for Sev.en, Alicia Lyons told the court her client does not want the creditors meeting to take place until after a report is handed down into the cause of the catastrophic explosion at Callide C in May 2021.

“The reason that relief is sought is because Sev.en has serious concerns about the conduct of the administrators (Deloitte),” she said.

“(As well) Sev.en seeks relief to extend the second creditors meeting to the 31st of October or a date not before the (special purpose administrators) have published a report into the incidents.”