Pasminco declaration formally made

The Age

1 April 05

The administrators of Pasminco Ltd have formally declared shareholders in the defunct zinc and lead producer are unlikely to receive a return on their shares, entitling them to claim their capital loss.

The declaration, the first to be made under new legislation, enables Pasminco shareholders to claim their capital losses without having to transfer their shares into a trust, said deListed, a division of BRG Pacific Pty Ltd set up by former Australian Shareholders Association chief executive Tony McLean to provide information on delisted companies.

Previously, only a liquidator - appointed when creditors decide the best way to maximise their return is to sell the assets - could issue a declaration acceptable to tax authorities, but that prerogative now extends to administrators.

Administrators take complete control of an insolvent company and runs the business while investigating its affairs and then recommending to creditors that it be wound up or continue.

The process can be very drawn out, particularly when litigation is involved, deListed said.

Stanilite Pacific Ltd, for example, has been in liquidation for more than eight years but litigation is underway and the liquidator is unable to issue the declaration because he believes there is still a possibility of a return to shareholders, it said.

The new legislation would speed up the process.

Pasminco was placed in administration in September 2001 after its debt tripled to more than $2.8 billion because of slumping metal prices and foreign exchange losses.

In April 2004 it company sold its mining and smelting assets to Zinifex Ltd in exchange for 500 million Zinifex shares.

Zinifex listed later that month and has performed well over the past year thanks to a resurgence in metal prices.