Kalium Lakes - Case Update

The joint administrators of Perth-based mining company Kalium Lakes have received a competing DOCA for the company at the 11^th hour. In their latest update to creditors, Martin Jones, Matthew Woods and Clint Joseph of KPMG advise that Shandong Nayu Energy Technologies (“NAYU”) has submitted a competing DOCA proposal for the company at the last minute, potentially impacting the administrators’ earlier recommendation that creditors accept a DOCA proposal from ASX-listed potash company Reward Minerals. The initial Reward DOCA contemplates the acquisition of shares of Kalium Lakes Potash and Kalium Lakes Infrastructure from the company, as well as the establishment of a creditor trust. The NAYU DOCA contemplates total consideration of $32 million, including a $23.2 million payment to secured creditors. To fund the DOCA contribution, NAYU needs to get approval from the Chinese government authorities to transfer funds to Australia. It appears the creditors’ meeting to vote on the DOCA proposals was held on 6 December. The outcome of the meeting is unclear.