Pilbara’s debt-laden Ngarluma Yindjibarndi Foundation saved from liquidation with restructure plan

An asset-rich Pilbara Aboriginal community organisation $5.5 million in debt has been saved from liquidation under a restructuring plan.

Creditors this month voted in favour of administrators Cor Cordis segregating and selling off properties owned by the Roebourne-based Ngarluma Yindjibarndi Foundation.

The sales process for those properties — a $10 million portfolio which includes the historic Whim Creek Hotel, the Ngurin Cultural Centre and a dozen other residential and commercial Roebourne properties — is expected to take 12 to 18 months.

Cor Cordis administrator Jeremy Nipps said the firm had recommended a restructure of NYFL as the option most likely to deliver better returns to creditors.

“Creditors agreed to essentially compromise the debt that NYFL owes them, in satisfaction of the proceeds that are going to be realised from certain property the foundation owns,” he said.

“If the company is wound up or goes through a restructure, it would still be 12 to 18 months before we could pay unsecured creditors, and through the restructure we can be a bit more measured with our approach to sale to explore the value on return for creditors.”

NYFL receives nearly $2 million a year from the Woodside Petroleum-operated North West Shelf Venture.

It went into administration in March this year owing about $2.8 million to secured creditors, $3.3 million to unsecured creditors and $390,000 in employee entitlements.

The group has 1800 members, about 50 local staff and runs tourism, retail, hospitality and employment services.

The administrators said the group had been “unduly reliant” on outside accountants and only discovered in mid-2016 that it owed the Australian Taxation Office more than $2 million. —and its financial difficulties had been exacerbated by the plunge in property values during the local economic downturn.

During the administration period, Cor Cordis has reviewed the organisation’s operations to stabilise cash flow, made changes to its financial reporting practices to improve transparency and introduced more training for the board.

Cor Cordis will oversee sale of the properties, having already engaged a selling agent, and has set up a creditors trust to collect the funds.

Mr Nipps said NYFL may be able to maintain part-ownership of some of its community ventures by partnering with other organisations.

Control is expected to be handed back to the board this month.