L&M Coal Holdings Ltd (LMCH), now believed to be owned by a Hong Kong group, has filed legal proceedings in the High Court against coal miner Bathurst Resources Ltd (ASX: BRL).
The claim goes back to the recent coal boom when Bathurst acquired leases in the Buller coalfield from the L&M group.
A report just before Christmas by Bathurst said LMCH was seeking a ruling on its claim for a payment of $US40 million ($NZ57.74 M) in a dispute for a sale and purchase (SPA) agreement – with subsequent amendments – between BR Coal Pty Ltd (obligations assumed by BRL) and a related royalty deed and its amendments entered into between what is now Buller Coal and LMCH back in 2010.
Bathurst’s company secretary Jason Hungerford said LMCH asserts BRL was required to make a $US40 M performance payment under the SPA.
BRL says that in defending the case the SPA provides that a failure to make a performance payment was not an actionable breach of or default under the SPA for so long as relevant royalty payments continue to be made under the royalty deed.
Hungerford iterated that BRL’s legal advisers have claimed that as long as the company maintains the royalty payments there has been no breach of the deed.
At the close of trading on the ASX yesterday Bathurst’s share price was holding at A8.1 cents at a time it wants to hold some market traction with the possibility of a new capital raising or financing arrangement to complete the acquisition of three coal mines from Solid Energy – as a joint venture with NZ company Tally’s Group.
In an earlier story on this dispute, correspondent Simon Hartley had been told that the Christchurch-based L&M group had sold LMCH to a Hong Kong group.
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