Antinuclear

Australian news, and some related international items

Financial peril for Adani’s Carmichael mine company

Profits of Adani’s Carmichael mine company tumble, leaving it in financial peril

Owner of Carmichael project can’t walk away from mine without descending further into distress, says energy expert, Guardian, Michael Slezak, 14 Nov 17, Profits of Adani Enterprises – the company in Adani Group’s complex structure that owns the proposed Carmichael coalmine – have collapsed almost 50% year-on-year, according to a half-yearly report released this week which does not mention the mine.

The results further show the company is in financial distress, according to Tim Buckley from the Institute of Energy Economics and Financial Analysis, who says they also reveal the company can’t walk away from the unviable Carmichael project without descending further into financial distress.

The Carmichael coalmine, which would be the largest ever built in Australia, has struggled to find financing for either the mine itself or the associated infrastructure such as the rail line that would transport coal to an export terminal on the Great Barrier Reef.

Every major Australian bank has said it will not be involved in the project, and the company has been seeking subsidised government finance from the Australian government and possibly also from China.

“If they tried to exit the project now, they would either have to write it off or find someone willing to buy it,” said Buckley.

If the project was written off or sold for significantly less than its current book value of US$1.15bn, the company would find it increasingly hard to finance its many other projects around the region, said Buckley.

Currently, the Adani Enterprises Limited – which is the only publicly listed company in the Adani Group – has a book value of just under US$2.3bn. Meanwhile, its latest report shows its debt has risen by almost US$400m to US$3.83bn………https://www.theguardian.com/business/2017/nov/15/profits-of-adanis-carmichael-mine-company-tumble-leaving-it-in-financial-peril

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November 15, 2017 - Posted by | business, climate change - global warming

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