Voluntary administrators are urgently reviewing the operations of Queensland Nickel (QNI), after mining magnate turned politician Clive Palmer yesterday put the Townsville-based company in the hands of external managers.
FTI Consulting will manage the administration of Queensland Nickel, with John Park, Stefan Dopking, Kelly-Anne Trenfield and Quentin Olde appointed as voluntary administrators.
Park said in a statement yesterday the administrators hope to continue to trade the company throughout the administration.
“We will undertake an urgent assessment of the financial position and ongoing viability of the company and its business operations,” he said.
“No significant changes to the company’s trading operations are anticipated in the immediate term.
“As administrators, we will act independently at all times, although we will work with Queensland Nickel management and staff in continuing to operate the business.”
In a separate statement, Queensland Nickel managing director Clive Mensink said he believes the company will be able to “trade out of administration”.
“It is my understanding that the administrators will be in contact with all stakeholders and the operations of QNI will continue on as usual,” he said.
“From our perspective it is business as usual and employees of QNI will continue productivity at this difficult time.
“QNI plays an important role in North Queensland’s economy and I believe that will remain the case in the future once restructuring is completed in this volatile commodity environment.
Palmer, who also owns iron ore mining company Mineralogy, purchased Queensland Nickel in 2009.
According to The Age, the company currently employs 550 workers, as well as contractors, at the Yabulu refinery in Townsville.
Until recently, the company had employed another 240 workers but Queensland Nickel sacked those employees just last week, blaming low nickel prices and a decision by the Queensland Government not to grant a $35 million loan to keep the business afloat.
At the time, Palmer said in a statement Queensland Nickel has spent close to $4 billion in North Queensland since 2009.
“Queensland Nickel has over $1.95 billion of net assets and no debt,” he said, according to the ABC.
“This valuation shows the [Queensland] Treasurer that there is no asset problem and these assets would secure any guarantee by the Queensland Government.”
The ABC reports Palmer is now under pressure to repay more than $6 million that Queensland Nickel donated to the Palmer United Party over the past two years, including $5,947,720 that was donated during the 2014-15 financial year.
Figures from the Electoral Commission of Queensland show the company made another donation of $288,516 to the Palmer United Party on December 31 last year.
Not the first administration for Palmer
This is not the first time a company owned by Clive Palmer has been placed in voluntary administration, with the Sunshine Coast resort owned by Palmer, the Hyatt Regency Coolum Golf Resort, entering voluntary administration in March 2012.
The resort, which was later renamed the Palmer Colum Resort, closed in 2015.
Palmer has previously backed calls to reform Australia’s insolvency laws to institute the equivalent of the US Chapter 11 bankruptcy proceedings in Australia.
Releasing a number of small business policies following the 2015 federal budget, Palmer said 85% of companies that go into Chapter 11 in the United States emerge as viable dynamic enterprises.
“We need to have a Chapter 11 like they have in the United States, where companies fail, the business continues so that the people and the families keep their jobs,” he said at the time.
“We can do it, there are so many small businesses in this country which go broke in their second year because they can’t provide provisional advice or they might not have the right business advice, but the idea is what we have to cling to.
“We need to make sure [SMEs] can make a profit, they can survive because they are the powerhouse of the nation.”
SmartCompany contacted Clive Palmer but did not receive a response prior to publication.