Epic: 3 days to �show cause� or close doors

Six years after paying the WA Government $2.4 billion for the Dampier to Bunbury Natural Gas Pipeline, Epic Energy now has just three days to show cause why it should not be forced to immediately pay back the $2.5b it still owes its banking syndicate.
Epic: 3 days to ‘show cause’ or close doors Epic: 3 days to ‘show cause’ or close doors Epic: 3 days to ‘show cause’ or close doors Epic: 3 days to ‘show cause’ or close doors Epic: 3 days to ‘show cause’ or close doors

Epic’s managing director, David Williams, said: “Epic has received what is essentially a ‘show cause’ notice from its banking syndicate.” The banks voted on Friday to begin the process of receivership, on a reported 2:1 majority.

Williams said Monday’s notice did not necessarily mean receivership although he admitted it that could lead to that.

“The notice states that the banks are considering issuing a notice of termination of the standstill arrangements.” The standstill arrangement had extended Epic’s payment date until June 30, in the expectancy that the pipeline would be sold and Epic able to discharge its debt.

However, the pipeline sale has been delayed by numerous issues, including claims of favouritism and a lack of transparency and the failure of the major customers to commit to new long term supply contracts.

It is understood only Australian Pipeline Trust, partnered with the Canadian Embridge group, and Envestra, teaming with the Hong Kong Chueng Kong Investments, are still formally bidding although neither is thought to have a concrete proposal on the table.

In addition to the standoff involving the pipeline’s major customers, there is disagreement as to who is liable to pay for a stamp duty bill of around $150 million, if a sale price of $2.5b is achieved.

Ernst and Young will take control over the DBNGP if Epic is placed into receivership.


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