From the Townsville BulletinKagara agony drags on for creditors...

From the Townsville Bulletin

Kagara agony drags on for creditors

TONY RAGGATT | March 8th, 2013

THE stricken creditors of the failed Kagara mining group have accused corporate undertakers of prolonging their agony over outstanding debts of as much as $100 million.

Also, federal and state Katter's Australian Party MPs claimed state and federal governments would reap more than $12 million in tax penalties and duties at the expense of employees and contractors.

"We are going to fight like tigers to ensure employees and contractors rightfully receive their entitlements," Kennedy federal MP Bob Katter said.

In a statement, voluntary administrators Taylor Woodings said they were meeting creditors committees monthly and continuing efforts to sell the group's assets but would give no indication of returns to unsecured creditors.

Some $40 million has been raised by selling Kagara's Mount Garnet processing plant, its Balcooma and Baal Gammon mines and its Einasleigh and Maitland exploration projects to Hong Kong investment group Snow Peak.

However, the money is being churned into wiping Kagara's secured debt, trading costs, administration expenses and for working capital.

Kagara crashed in April last year, reportedly with debts of up to $95 million to 830 creditors, throwing 350 people out of work and sending suppliers and contractors broke.

Taylor Woodings was appointed to clean up the mess. However, Taylor Woodings is yet to hold a second meeting of creditors - usually held within 35 days of appointment.

"The administration has been going on too long," said one unsecured creditor, who claimed administrators were "looking after themselves".

Dalrymple state MP Shane Knuth said he was disturbed that some families had lost everything and that small businesses had been forced to close and lay off staff.

"This money should have come back to the local economy," Mr Knuth said.

In a statement, administrator Stefan Dopking said the firm was meeting every month with the committees of creditors which were working closely with administrators.

"The future direction of the administration will become clearer when it is known what happens to the assets after the sale campaign," he said.

Sales agreements for assets including the Thalanga area mines and processing plant and Mungana mine and assets, are hoped to be finalised in April.

In February, administrators said they had gained another extension to the convening period for a second meeting of creditors of up to April 30 to give them time to complete a heads of agreement between Kagara and related entity Mungana Goldmines Ltd and to progress the group's sale or restructure.

PCF Capital Group and Rothschild Australia are co-ordinating the sales of assets in North Queensland and the Admiral Bay nickel resource in Western Australia.