Don’t throw Palmer a lifeline: unionist

A former union delegate at Clive Palmer’s nickel plant says the business should be allowed to collapse into liquidation.

6/3/2016; Clive Palmer gets into his car after leaves a restaurant after lunch with a friend at Sanctuary Cove on the Gold Coast. Palmer seemed relaxed just a day before a creditors meeting over his nickel refinery in Townsville. Lyndon Mechielsen/The Australian

A former union delegate and worker at Clive Palmer’s nickel plant is urging the Queensland government and administrators to let the business collapse into liquidation with the loss of 550 more jobs, so staff sacked months ago can access redundancy entitlements.

As a committee of Queensland Nickel’s creditors prepares for today’s crucial meeting about the troubled refinery’s future, Ian Mawhirt says the state government should not loan $10m to keep the plant afloat. In a sudden about-face, Queensland Treasurer Curtis Pitt yesterday said the government would consider loaning the money, on strict conditions including that Mr Palmer exit the business.

Administrators FTI Consulting are expected to tell the creditors’ committee meeting in Townsville that QNI, the refinery’s operating company, will collapse into liquidation imminently without an immediate cash injection. It is not clear whether administrators would be able to satisfy the government’s conditions quickly enough to convince Mr Pitt to hand over the money and save the refinery.

The Australian understands FTI will also shoot down Mr Palmer’s $250m proposal to rescue the plant using the assets of his Waratah Coal and China First companies, including coal tenements in the Galilee Basin. Administrators are expected to tell the committee the proposal is not viable in its current form and must be reworked.

Townsville-based QNI collapsed into administration in January, three days after 237 workers — including Mr Mawhirt — were made redundant. QNI does not have enough money to pay those workers’ redundancy entitlements, and they must wait until it is in liquidation before they can apply for a payout under the federal government’s Fair Entitlements Guarantee safety net scheme.

About 550 workers are still employed at the Yabulu refinery.

Mr Mawhirt, 60, worked at QNI for 16 years and is owed about $160,000 in entitlements. He said the majority of current and former staff believed the refinery was doomed, and hoped liquidation would occur quickly.

“A lot of us just don’t want to see Clive Palmer achieve a (deed of company arrangement) and potentially get the plant back because we do not have any confidence in him or management,” said Mr Mawhirt, who was a delegate for the Australian Workers’ Union until his recent redundancy.

“I hope that the state government doesn’t support him and doesn’t tip in the $10m that is being asked for because he doesn’t deserve it. The redundant workers will not be pleased if the government props up the refinery as it will (delay) our chance of getting any money.”

Mr Mawhirt’s preference for liquidation is at odds with AWU state secretary Ben Swan, who has called for an urgent “injection of capital ... to bring the plant completely up to scratch”. FTI Consulting warned the state government last week that $10m was urgently needed to prevent the business from falling into liquidation as early as today.

Mr Pitt denied demands from Mr Palmer late last year for the government to act as guarantor on a $35m bank loan to QNI. However, yesterday he said any cash injection from the government was contingent on it not ending up with Mr Palmer or his businesses.

“We’ve set out some strong conditions that we would want to see satisfied,” Mr Pitt told The Australian. “Those come down to ensuring our independent advisers have full access to the books to understand the situation, that any moneys would be used for the purpose of dealing with the cash flow issue and with creditors … and (that the money) will be for the purpose of (the administrators) trying to seek a new owner of the business.”

“We’d have an expectation that Mr Palmer fully exit the business.”

Mr Palmer is the ultimate sole shareholder of QNI, the refinery’s operating company. In addition, companies he controls still own the refinery itself.

This means that any prospective buyer of the refinery must win the support of the administrators, the creditors and Mr Palmer to secure a sale. Mr Palmer did not respond to The Australian’s questions yesterday.

The Townsville-based firm Sister Cities Partners is advocating a community buyback of the refinery, which could see creditors exchange their debt for equity in a restructured operation after QNI goes into liquidation.

Chairman Warwick Powell said his committee of former employees, major creditors and local businesses had come up with a financially viable model which would be put to FTI at today’s meeting. He said a takeover would mean some “very tough decisions” for creditors and inevitable job losses but he said it was the only option left to administrators.

“The name of the game is belt-tightening, there is no way around that,” Mr Powell said.

“This would be no easy restructure but we make the tough decisions or we shut down, it’s as simple as that.”

The refinery remains in a maintenance shutdown as administrators wait for delivery of delayed shipments of ore from New Caledonia and the Philippines.

Mr Powell said he had “meaningful” recent discussions with two New Caledonia mine chiefs who were both “very interested” in a refinery model which did not include Mr Palmer.

with Sarah Elks