Twinza Oil - Case Update

The Federal Court of Australia has granted orders convening a single meeting of scheme creditors for a proposed scheme of arrangement in respect of Twinza Oil, an Australian public company pursuing the Pasca A offshore gas project in Papua New Guinea, while rejecting a request for an adjournment by two interested persons linked to the company’s founder, Bill Clough.

Hayden White and Ian Francis of FTI Consulting were appointed receivers in February 2025. At the time, Twinza owed its secured lenders approximately US$324 million (US$55–128 million more than the value of its assets). The Pasca A offshore gas project is said to be on track to progress to the next phase, but Twinza does not have the funds to continue. The purpose of the scheme is to avoid a winding up and unlock funding to allow the project to proceed.

Economically, the scheme delivers a debt-for-equity swap: senior debt reduces by about 92% (to approximately US$30–35 million), with senior creditors set to receive 85% of post-implementation equity. The remaining 15% will go to holders of convertible redeemable preference shares (10%) and existing shareholders (5%). The scheme would also preserve employees and certain trade creditors. An independent expert report from BDO opined that, absent the scheme and on a wind-up within six months, senior lenders would likely recover 55–78%, while unsecured creditors and shareholders would receive nil. With the scheme, senior lenders are expected to be made whole (via equity plus the resized facility) and unsecured creditors paid in full in the ordinary course.

Certain entities associated with Mr Clough sought an adjournment. The Court refused, citing the significant financial impact of any delay considering that default interest of 35% is accruing on principal debt of US$324 million. The Court also noted that these entities chose to change lawyers late in the game, and that Twinza should not be prejudiced by any adjournment. Finally, the Court found that any class objections could be aired at the second hearing.

The Court ultimately concluded that the jurisdictional prerequisites were met and that, if the requisite majorities are achieved, the scheme is of a nature the Court would likely approve on an unopposed second hearing application.

The first meeting is scheduled for 12 September, with the second hearing listed for 23 September.

The decision can be found HERE.

Professionals involved:

• Kanaga Dharmananda SC and Leon Firios of Quayside Chambers (instructed by Lavan) for Twinza

• Cameron Belyea of Clayton Utz for Tor Asia

• Martin Bennett of Bennett Law for the Clough entities