Mirabela sale process unsuccessful; creditors vote for liquidation

By Caroline Salls

Pittsburgh, June 15 – Mirabela Nickel Ltd. did not receive any acceptable offers for its assets following an extensive sale process and was unable to reach an agreement for a noteholder bid for the company’s shares in Mirabela Mineracao de Brasil Ltda., according to a company news release.

Given that a noteholder bid could not be progressed to completion and no deed of company arrangement was proposed, Mirabela’s creditors voted to place the relevant Mirabela companies in liquidation on June 13.

Mirabela said the last noteholder bid proposal included debt forgiveness of $37.5 million in exchange for the transfer of the shares and an intercompany loan.

The company said the conditions to that proposal included the reclassification of the real estate properties to urban real estate from rural real estate and receipt of change-of-control consents and mineral licensing authorizations.

In order for an alternative noteholder bid to proceed, the company said any noteholder or group of noteholders would be required to control a sufficient majority of the notes to approve the implementation of the proposed transaction and provide security pre-funding and/or indemnity to the notes trustee in accordance.

Following appointment of a liquidator, the company said its receivers are conducting an assessment of the prospects of a sale of the assets and have re-engaged with interested parties.

The receivers will continue to control the company’s secured property until a transaction is implemented or until they retire, which would happen if there is no genuine prospect of concluding a transaction within a reasonable time frame.

Mirabela said the receivers noted that there is also a potential risk of bankruptcy proceedings being filed in Brazil having regard to the liquidation of the parent entities of the Brazilian entity.

Following payment of trading costs, future liabilities, staff redundancies, legal, adviser and receivers’ fees and disbursements, the company said there was roughly A$150,000 of available cash at Mirabela Nickel as of June 14.

The noteholders are entitled to any excess funds held by the company following completion of the receivership.

The company said the receivers explored various funding alternatives from external parties and the noteholders, but no proposal has been viable so far.

According to the release, the operations in Brazil have been on care and maintenance since April, and management expects the subsidiary’s existing cash balance to be sufficient to sustain the operations in Brazil on that basis until at least September.

The company said its Australian corporate headquarters has been closed and all employees have been terminated. Mirabela Nickel chief executive officer Maryse Belanger, who was based in Brazil, resigned from her role as CEO and from the company’s board on June 6.

Mirabela said several senior executives continue to be employed in Brazil. One of those executives is expected to replace the CEO on the board.

Mirabela is a nickel producer based in Perth, Western Australia currently operating under the appointment of administrators and receivers and managers.

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