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Padbury Mining comes clean on Oakajee funding

ANDREW BURRELL |
The Australian |
May 02, 2014 10:32AM




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PADBURY Mining has admitted it never secured all of the funding it needed for its botched $6.5 billion plan to revive the Oakajee port and rail project — despite telling investors last month it had “secured” 100 per cent of the money from equity investors.

Shares in the Perth-based company collapsed by 80 per cent to 0.7 cents soon after resuming trading as investors punished the company over Oakajee fiasco.

The company was this morning reinstated to the ASX after three weeks of intense scrutiny following its funding deal with colourful Sydney dealmaker Roland Frank Bleyer.

Padbury terminated the deal this week after being unable to provide evidence that Mr Bleyer’s web of companies ever had the capacity to provide the funding.

The company is now the subject of an investigation by the Australian Securities and Investments Commission for allegedly misleading the market.

In response to a string of queries from the ASX, Padbury admitted this morning it should have told investors on April 11 that it was required to procure a bank to issue a demand guarantee in relation to 20 per cent of the $6.5bn funding package to build Oakajee.

Padbury also admitted that its April 11 announcement was not reviewed by external legal counsel.

It also revealed it only had 40 days to find the bank guarantee for the 20 per cent of the project funding — a condition of the funding agreement that that was not given to investors.

Padbury said it had been in talks with a number of parties in an attempt to satisfy the condition of the agreement and it had believed there was a “reasonable prospect” of finding the guarantee.

It also declined to answer an ASX question about whether Padbury directors had approved the announcement in accordance with the company’s own corporate governance rules.

It said answering the question may deny directors protection against self-incrimination that would be available as part of an ASIC investigation.

The Padbury announcement on April 11 sparked scrutiny of Mr Bleyer’s past business dealings amid revelations of a string of failed business deals as well as civil and criminal cases brought against him in the US.

Mr Bleyer told The Australian last week he would find the money from a bank in the Cayman Islands.

West Australian Premier Colin Barnett said this week he had spent “about 30 seconds” considering Padbury’s plan to revive the long-stalled Oakajee project before dismissing it as unrealistic.





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