Orpheus, former partner agree on out of court settlement

ASX-listed Orpheus Energy and its former partner, Indonesian businessman Nugroho Suksmanto, have finally reached an out of court settlement over a debt dispute, Bisnis Indonesia reported on Wednesday.

The paper said that under the agreement, Nugroho would repay its debts to Orpheus through 18-month installment starting July of this year, using proceeds from his coal mines in South Kalimantan.

The paper quoted Nugroho as adding that he had also put up his personal assets including land in Jakarta and a 10.5 percent stake in PT Abadi Guna Papan in case proceeds from the mines are not sufficient.

He claimed that the mines, which are expected to produce 150,000-200,000 tons of coal per month, are expected to export part of the output to South Korea, and are in talks with state-owned power firm PT PLN for coal supply.

Orpheus commenced on March 26 bankruptcy proceedings against its former Indonesian partner Nugro as the latter has not been able to repay outstanding debt worth about US$7.5 million.

But in April, Nugroho told the court that an out of court settlement was being negotiated.

Orpheus in July of last year signed agreements with Nugroho, PT Mega Coal (owned by Nugroho) and related parties regarding the sale of its Indonesian assets for total proceeds of approximately US$8.2million.

Orpheus announced March 9, 2015 that after lengthy negotiations with its creditor PT Baraindo and also its debtor Nugroho, the company has executed a legally binding debt novation agreement. Under the terms of the agreement, Orpheus has paid PT Baraindo A$270,000 from the proceeds of a rights issue, and the A$792,100 balance of the debt owing to PT Baraindo has been assigned to Nugroho.

The company said in March that this means the company no longer have external debt. It correspondingly reduces the amount owed to Orpheus by Nugroho to around US$7.5 million. (*)