External creditors to Lyon group companies who say they are owed around $30 million by the ambitious solar and storage developer have been told they may get no return from the liquidated assets, depending on the sale price of its undeveloped projects.
Lyon Infrastructure Investments 1, Lyon Solar and Lyon Battery Storage were placed in the hands of liquidators Deloitte in October last year, the final act of an extended dispute between the company and various shareholders and suppliers that saw Deloitte appointed as administrators in May.
The report on Lyon Infrastructure lodged by Deloitte with the Australian Securities and Investment Commission paints a bleak picture for creditors. It also questions the actions of Lyon directors, saying it suspects trading while insolvent.
Deloitte also queries some director-related transactions, in particular the use of part of a $10 million loan from Japan energy giant Jera and a separate $5 million loan from US investment firm Magnetar.
The liquidators said they have identified “multiple potential claims” against the companies’ directors for: breach of directors’ duties, insolvent trading, unreasonable director related transactions, and unfair preference payments.
The liquidators have lodged a claim against the directors for breaching the terms of the joint development agreement entered with Jera Power (by spending part of the $10 million unsecured loan facility on unapproved director/consulting fees and related party payments).
They have lodged a similar claim against the directors for breaching the terms of the agreements entered with Magnetar Solar Australia (Magnetar), by spending half of the $5 million loan on unapproved payments including business overheads, employee expenses and director/consulting fees.
“We have identified a number of breaches by the Companies’ directors and will duly lodge a report with ASIC pursuant to Section 533 of the Act.” the liquidators note.
The final distribution will be governed by the sales process of three assets, which elicited expressions of interest from 71 different parties (likely tyre-kicking from potential competitors) and firm offers from six parties.
The liquidators say offers have been accepted from two parties, one for the Riverland battery storage project in South Australia, and another for the Nowingi and Cape York battery storage projects in Victoria and Queensland respectively. No price has been revealed at this time.
- “At the time of this report, we are in the final stages of the sale for the Projects with the prospective purchasers,” the liquidators write.
- “As these agreements are yet to be finalised, we are unable to comment on the structure of the transaction or the agreed purchase price to not jeopardise the sales.”
The accounts lodged by Deloitte shows total creditor claims of nearly $65 million from the three companies, although half of this appears to be “related party” creditor claims.
The unrelated party claims total $21 million with Lyon Infrastructure (first column in table above), $7.1 million with Lyon Solar (middle), and $8.2 million with Lyon Battery Storage (right hand column).
The low return option suggests zero cents in the dollar for creditors in each company, while the “high return” scenario suggests just 3c in the dollar return for Lyon Infrastructure and 1c for Lyon Battery Storage. Lyon Solar creditors are likely to get nothing in either scenario.
