THE receiver for Burrup Fertilisers says the Pankaj Oswal-controlled business was delaying payments to some suppliers before it was appointed to the company last week.
PPB Advisory also revealed it would seek a meeting with Burrup Fertilisers' directors in the next fortnight to discuss "certain financial transactions", as analysts suggested that the business could fetch more than $1.2 billion.
"Cash flow has been strong since the appointment," PPB said in a statement released yesterday. "Sufficient liquidity is available for suppliers now, in contrast to the position prior to the appointment.
"Payments to local suppliers are being regularised. Prior to the appointment a number of suppliers were on delayed payment terms, causing obvious stress for suppliers and production issues for the plant."
The managing director, Mr Oswal, is in India and is due back in Perth in early January.
Burrup Holdings, the parent company of Burrup Fertilisers, is 65 per cent owned by the Oswal family and 35 per cent by the Norwegian group Yara International. PPB was appointed to Burrup Fertilisers, which owns and operates the ammonia plant, as well as the Oswals' holdings in Burrup Holdings but not to Yara's stake.
Mr Oswal has disputed the receiver's right to sell the entire 65 per cent. ANZ Bank appointed PPB late on Friday, citing ''default events'' in relation to its loans and ''financial irregularities''.
ANZ is owed $360 million by the Burrup business and $440 million is outstanding from Mr Oswal's private interests. PPB is not responsible for recovering the latter loans.
According to Commonwealth Bank analysts led by Andrew McLennan, the Oswal stake in Burrup is valued at between $1.1 billion and $1.2 billion but could be worth much more.
"Despite being a volatile business model at the revenue line, the low operating costs at Burrup make this a very profitable asset," Mr McLennan said in a note to clients.
"Given the asset's investment merits [and] contestability … we believe Burrup Fertilisers could fetch substantially more than the above range."
Yara, Wesfarmers, Incitec Pivot and Orica are among companies thought to be interested in Burrup Fertilisers.
PPB confirmed yesterday that ''numerous inquiries'' expressing interest in the company had already been lodged with it.
Mr McLennan said Wesfarmers could afford to pay up to $1.35 billion before the acquisition would become dilutive but said the decision could come down to the Australian Competition and Consumer Commission, given its existing position in the ammonium nitrate market.
The Australian Securities and Investment Commission is monitoring the receiver's investigation into Burrup's accounts.
It is understood that complaints were made to ASIC last month about alleged financial irregularities at Burrup, but the regulator declined to take action at that time.
