Bushfire-hit Kangaroo Island Plantation Timbers (KIPT), which in February received a first progress payment of $10 million under its treecrop insurance policy with Primacy Underwriting Management, has now provided an update with respect to its building replacement insurance.
The separate policy covers fire damage to houses, fences, and sheds. KIPT – the expectation of which was a range of between $2 million and $6 million in insurance proceeds for the loss of such assets – said it has agreed a sum of $4.2 million to cover the replacement cost of the fire-damaged houses.
Meanwhile an agreement in relation to the loss of sheds is yet to be reached.
“The board has resolved to apply the $4.2 million house insurance proceeds immediately to reduce KIPT’s bank debt,” stated the timber firm in an April 01 regulatory filing.
“Further announcements will be made as the company settles its various remaining insurance and legal claims and extinguishes its bank debt.”
In accordance with the Commonwealth Bank facility covenants, KIPT is required to repay loans with any insurance proceeds in excess of $250,000. Last month it was revealed that, in support of the fire-hit business, CBA has requested only a partial repayment.
