Suksmanto now owes Orpheus and its group around $7.5 million and it wants him hauled in front of a judge and forced to pay up.
It has lodged a bankruptcy petition against its former partner in the Jakarta Commercial Court, because the businessman provided a personal undertaking last June to settle all outstanding debts by PT Mega Coal and related parties as part of the sale.
Orpheus said it had engaged in exhaustive negotiations since August, but the funds had never been paid.
The Commercial Court will make a determination on Suksmanto’s bankruptcy position within 60 days of the petition lodgement.
The decision is enforceable even if Suksmanto files an appeal to the Supreme Court, which has 60 days to render a decision that will be subject to civil review.
The penalty for bankruptcy includes transforming the debtor’s estate into cash to pay creditors. Should Suksmanto pay Orpheus during the process the company can withdraw the legal action.
The Australian junior elected to sell its assets to Mega Coal last year describing them as non-core and non-performing, with its investment to date not inspiring confidence.
It hoped that it would recover all the funds invested since it purchased its 51% interest from Mega in 2011 and book a profit on the sale of $3.9 million.
In November 2011, Orpheus paid around $4 million to acquire six prospective coal tenements in the Papua province and East Kalimantan and developed the ADK coal mine, which ramped up just in time to enjoy falling coal prices. Production was also impacted by a boundary dispute with another miner.
Orpheus had some trouble getting its funding back from Mega Coal so it secured the personal undertaking with Suksmanto.
For the past year Orpheus has been “re-calibrating its activities” and looking for something to invest in, but has so far failed to close a deal.
It had closed on a “potentially disruptive” gold processing technology, but that deal was terminated in December.
Last year it posted a $9.8 million loss, largely attributed to the fact it had handed over its coal assets without getting any cash for them.
