Thursday September 20, 12:20 pm Eastern Time
Voluntary Administrators at Pasminco
World's Largest Zinc and Lead Producer Pasminco Is Placed in Voluntary Administration
PERTH, Australia (AP) -- Mining giant Pasminco was being run by voluntary administrators Thursday as it battled to survive huge debts and plummeting zinc prices.
Pasminco, the world's largest producer of lead and zinc and employing more than 4,000 workers, had debts of $1.3 billion when administrators were called in late Wednesday night.
Pasminco chief executive Greig Gailey said the directors had taken the only action available given the uncertainty surrounding the company's future access to credit.
``The administrator is expected to have a line of credit which will ensure that business operations will continue as usual,'' he said.
Pasminco accounts for eight percent of global zinc supplies and four percent of lead. It ranks third among world silver producers.
Pasminco's mines and smelters in Australia, the Netherlands and the United States will continue to operate under the voluntary administrators John Spark and Peter McCluskey.
The company operates a smelter in Budel, southeast Netherlands and another smelter in Clarksville, Tenn. It runs a zinc mine in Gordonsville, Tenn.
Trading in Pasminco shares was suspended after Wednesday's
session with shares trading at 2.5 cents, giving the company a
value of about $27.5 million. In June 1997, Pasminco was valued at
$1.54 billion.
Pasminco's operations will continue until the administrator had determined ``the most appropriate course of action'', the company said.
The cash-strapped company last week posted a full year net loss of $357.8 million, reflecting both the impact of record low zinc prices and the company's currency hedging positions. Pasminco had invested on the assumption the Australian dollar would rise in value this year. Instead, its value slumped to all-time lows. |
