WICET denies lender's claims in $40m court challenge
WIGGINS Island Coal Export Terminal has denied claims by its junior lenders who have started court proceedings to sue the company for $40million.
The legal action against the coal exporter is being spearheaded by Hong Kong hedge fund SSG that alleges WICET broke contractual arrangements.
SSG, which is being represented by legal firm Atanaskovic Hartnell, claims WICET should have changed its terminal fee to ensure shippers were charged enough to cover handling costs and to offer dividend repayments to junior lenders.
The ship handling charge rose from $14.16 per tonne in 2016 to $21.83 per tonne in 2017 and has been an issue for WICET since it opened during the coal boom in mid-2015.
Three of the original eight miner owners - Bandanna Energy, Caledon Coal and Cockatoo Coal - blamed expensive port handling costs and the take-or-pay agreements at WICET for their collapse and liquidation.
The court challenge comes as the five remaining miner owners of WICET - Glencore, New Hope, Aquila Resources, Coronada Curragh and Yancoal - work to refinance its $4billion of debt by next month.
The five have been unable to claw back lost revenue from the companies that have left the consortium because it has not been operating at full capacity.
The Australian reported WICET is being sued for $40 million, and if successful will need to pay all Wiggins Island Preference shareholders $220 million.
Last Friday was the deadline for WICET to respond to the claims, which The Observer understands they opposed.
WICET claims that conditions were not met by WIP shareholders such as SSG for dividends to be paid to them.
On Friday SSG and WICET will face New South Wales Supreme Court for a directions hearing.