Clive Palmer resources company ‘near insolvency’
CLIVE Palmer’s resources company is suspended again and will be on the brink of insolvency without another cash injection.
CLIVE Palmer’s troubled resources company, formerly run by his sole political representative, senator Zhenya Wang, is suspended again and will be on the brink of insolvency without another cash injection from the Palmer United Party boss.
The removal from trading on the Australian Securities Exchange of Australasian Resources, a company in which Mr Palmer owns about 70 per cent of the shares, which last sold for one cent each, came a day after the closure of his dinosaur park and tourism resort on Queensland’s Sunshine Coast at Coolum.
The iron ore exploration company had $295,000 in the bank at the end of December, after a three-month period in which its running costs were a relatively meagre $374,000, according to its last cash flow report.
Its directors, who include Mr Palmer’s closest friends and confidants, and relatives, told shareholders that for the three months to March 31, they expected to have cut running costs further to $210,000 — which would mean that just $85,000 would be left in 10 days unless Mr Palmer tips in more money to keep it solvent.
His flagship company, Mineralogy, has already made loans totalling $2.7 million to ensure Australasian Resources can continue to pay its bills and remain a going concern.
The fees payable to its directors — who include his nephew, Clive Mensink — are accruing rather than being paid, pending a “working capital solution”.
The accounts disclose that Mr Wang received a salary of $200,000 a year until he quit to take up his Senate role.
The company has been a disaster for investors: shares have collapsed from $1.37 in 2008 to 1c when last traded.
Its failure to lodge half-year accounts in accordance with listing rules of the ASX led to its suspension from official quotation on Tuesday. It has moved into office space controlled by Mineralogy.
Its chairman, Domenic Martino, who sold about 200,000 shares in the company according to the annual report, has told investors of a plan to achieve an iron ore mine at a cost of $4 billion with a life of about 25 years.
The company has iron ore reserves near Karratha, but these remain undeveloped amid legal disputes with a Chinese government-owned company, which has rejected Mr Palmer’s demands for royalties he insists are owed.
The lack of cash flow from expected royalties has coincided with the downsizing of Mr Palmer’s businesses, including the resort at Coolum.