Cudeco’s fate tied up in legal wrangling

ADMINISTRATORS of collapsed North Queensland miner Cudeco used a casting vote to accept plans to partially pay its debts and merge assets into the Chinese-owned Mount Cuthbert mine, despite objections from many creditors and retail shareholders.

Meanwhile, the administrators, Cor Cordis, say they have also lodged a report that details potential breaches and offences allegedly committed by Cudeco’s former and current directors and officers.

Cudeco, with the support of Chinese financiers, developed the Rocklands copper, gold and cobalt operation near Cloncurry in 2016 before falling into receivership and administration in 2019.

The operation is estimated to have racked up trading losses of almost $610 million in the four years to 2019.

According to the minutes of a creditors’ meeting this month, the administrators used the casting vote to pass a resolution to execute a planned deed of company arrangement.

While a majority 73 per cent in value of creditors voted for the resolution, a majority of 79 per cent in number voted against it, creating a deadlock.

Meanwhile, a group of retail shareholders is threatening a class action and lobbying to stop the deed proceeding.

The minutes say the group claims retail shareholders have been “completely disenfranchised” and “appallingly let down” by the company’s board, a major contractor and “by the system”.

Administrators say there might be grounds for potential claims against current and former directors for insolvent trading but that they believe it is in the interests of creditors to accept the deed.

Employees would be paid up to 64c in the dollar and small unsecured creditors up to 24c in the dollar.

The Federal Court is expected to decide whether the deed proceeds.