Pike River Coal Mining Company is unlikely to repay loans

Pike River Coal Co., owner of a coal mine in New Zealand, where 29 miners died after the explosion last month, had receivers appointed after telling the principal creditors are unlikely to be able to repay loans.

Administrators from PricewaterhouseCoopers were appointed by New Zealand Oil & Gas Ltd., which owns about 30 percent of the shares of the company and is one of the largest secured creditors, at the request of the board Pike, President John Dow, said in a statement. Pike River shares have been suspended since Nov. 22 after the first explosion at the mine on the west coast of South Island in the nation.

"The company is in a precarious situation financially," Dow Jones said in a statement.

The first explosion in Wellington, New Zealand based on Pike River mine occurred on 19 November, followed by a larger explosion on 24 November that led the police to say he would not have survived. Rescuers have so far been unable to enter the mine, part of which is burning underground. The incident is the country's worst mining disaster in 96 years.

"It will be a long time before any resumption of mining can be contemplated, with Pike River quickly to the insolvency, bankruptcy is an inevitable step," said David Salisbury, New Zealand Oil & Gas chief executive officer, in a statement.

New Zealand Oil shares fell 2 cents to 87 cents in New Zealand at 12:45 pm in Wellington. Pike River traded at 88 cents in New Zealand on 19 November, giving it a market value of NZ $ 356,700,000 ($ 266,500,000).

Uncertain Future

The Board has informed the recipients that their priorities are to recover the bodies of the dead and make the mine safe to cooperate with all investigations into the cause of the disaster, and to ensure that employees get their rights, "said Dow.

The board also wants to preserve the asset value "while recognizing that there is considerable uncertainty about the future of the mine," he said. "Both Pike and New Zealand oil are supportive of any intention to reopen the mine over time."

New Zealand said oil seal Pike had confirmed their debts are substantial and above their cash and other predictable sources of funds immediately, the Wellington-based company said in a separate statement.