Receivers for Pike River Coal will get $80 million from the company's insurers.
Receivers John Fisk, David Bridgman and Malcolm Hollis, from PwC, said they had successfully reached a settlement with Pike River Coal's insurers in respect of material damage and business interruption claims arising from last November's fatal mine explosions, and had formed a plan to pay the company's unsecured creditors.
Pike River Coal's 29.4 per cent owner, New Zealand Oil and Gas (NZOG), said it expects to receive about $41.3 million from the company's insurers for the damage and business interruption insurance claims associated with the explosion.
Forsyth Barr analyst Andrew Harvey-Green estimated the settlement would add a theoretical 10.5c to NZOG's share price.
"There was always a bit of uncertainty around NZOG and what it might get back from its investment in Pike River Coal, and obviously the insurance component will be a very important part of that,'' Harvey-Green said.
Pike River Coal has taken a heavy toll on NZOG's profitability. For the year to June 30, NZOG reported a net loss after tax of $75.9 million, which was an improvement on the position at the half year, when the net loss stood at $99.0m. The annual accounts included Pike River Coal-related provisions and losses of $98.8 million.
The stock, which took a battering in the aftermath of the disaster, rallied by 3c to close at 71c on Monday, having peaked earlier in the day at 74c. NZOG traded at $1.33 just before the disaster struck.
NZOG said about $6.3m will be paid to the owners of leased mining equipment arising from their priority rights, leaving about $73.7m to be put towards Pike River Coal's debts. The Bank of New Zealand is a first ranking secured creditor owed about $23.2m and will be paid in full.
As the other first ranking secured creditor, NZOG had legal priority to all of the remaining money, but chief executive David Salisbury said NZOG recognised the "huge and ongoing'' impact the tragic events have had on the West Coast community.
"Hopefully all of Pike River's creditors can receive full payment when the sale of the mine occurs.''
Mr Salisbury said NZOG would support the receivers using some of the insurance payout to make a voluntary early payment to all unsecured creditors.
NZOG will itself receive about $38.3m as a secured creditor and $3.0m as an unsecured creditor, but will still be owed about $14.7m in secured debt and $12.1m in unsecured debt.
Pike River's West Coast mine is up for sale and NZOG expects to recover its remaining secured debt, and possibly some or all of its remaining unsecured debt, through the sale process.
The receivers are continuing with the mine stabilisation and tunnel reclamation activities.
