NZ Oil & Gas, a 35% shareholder in PRC, said arrangements were being made for PRC to draw down the $12 million balance of a $25 million short-term funding facility on the understanding that all secured creditors approved the standstill.
That approval was gained yesterday morning.
Craigs Investment Partners broker Chris Timms said the standstill gave the company space to settle down after the tragedy without having to go through the normal administration processes. The $12 million was expected to meet PRC's short-term funding obligations.
The company remained reliant on a major shareholder for money and had no funding beyond December before the standstill period was approved.
The corporate story behind the human disaster is also one of great hope that faded slowly.
Pike River Coal's other major shareholders are customers Gujarat NRE Ltd of India, with a 7.1% stake, and Saurashtra World Holding Private Ltd with a 5.5% stake.
As at July 2, New Zealand institutional investor Accident Compensation Corp held a 4.9% stake and New Zealand Superannuation Fund had 1.7%.
Pike River Coal became a listed company on the NZX and ASX following a successful initial public offering in July 2007, but it has gone back to investors cap-in-hand four times as the mine development ran into problems.
In March 2008, it raised $60 million in a rights issue and $US30 million in a convertible bond issue, and in April 2009 raised $45 million in a rights issue and share placement.
In May this year, it was back in the market with a $10 million share placement and a $40 million rights issue. In September, NZOG agreed to the $25 million short-term funding facility.
The mine was marketed as an exciting private-sector project in an industry dominated by a state-owned coal producer at a time of hope that New Zealand could partially replicate the Australian resource success story with its own new projects.
The Pike River mine was an attempt to mine sensitively on the edge of a national park covered in ancient native trees. It was promoted as a mine of the future where mining could address environmental concerns and provide well-paid work in a region reliant on low-paid tourism jobs and a fading timber industry.
Those opposing the mine were concerned about subsidence and acid mine drainage. The final go ahead came from a Labour-led government in March 2004.
"This mine does represent an intrusion into an area of high conservation values and a decision on whether to allow it to go ahead has been a very difficult one to make because of this," then conservation minister Chris Carter said when giving conditional approval.
Development was slow. Production was delayed by a partial collapse of a ventilation shaft, and by striking hard rock near the pit bottom.
The first shipment of coal was sent to India in February 2010 and the second was dispatched in the days after the Christchurch earthquake.
- Additional reporting NZPA
