Mariner will sell stake in Killalea

The company behind the plans to develop Killalea State Park says it has "verbally agreed" to sell its shareholding in Killalea Coastal Investments Ltd to a third party.In an announcement to the ASX late yesterday, in which it reported a net loss of $61.6 million, Mariner said a draft sales agreement was being negotiated between the parties."The counterparty is completing due diligence," the company said."The final sales documents are expected to be finalised and concluded shortly."The indicative offer is at its carrying amount." The announcement did not indicate who the new buyer would be or the value the company had put on the Killalea lease agreement.Killalea Trust chair Ed Gilmore said he was unaware that an agreement had been reached by Mariner to sell its interest in Killalea and did not know who the third party was."We've had discussions with (Mariner) and are expecting to get a report back," Mr Gilmore said."I'm not sure if they are going to sell or are looking for another venture partner to replace Babcock & Brown ... we'll wait and see, we should know pretty soon."Mr Gilmore said he was confident the new buyers would be known to the trust before the sale proceeded."Our discussions have to be finalised before that," he said.South Coast Labour Council secretary Arthur Rorris said "the Killalea farce continues"."First we had Babcock & Brown telling the world it wasn't going under and it would complete the Killalea deal just as it hit the wall, then we had Mariner proclaiming it was taking on the venture and finalising its application. "Now it appears Mariner is selling out as well," Mr Rorris said.The Environmental Defender's Office argues Mariner's agreement to lease parts of the Killalea State Park is not a proprietary interest, and unlike a lease it cannot be sold.Mr Rorris said the announcement appears to be in a clear breach of its agreement with the Killalea Trust."On behalf of the Labour Council and opponents of this deal, now is the time for our community to close ranks and move on," he urged.The controversial 52-year lease agreement between the Killalea State Park Trust and Killalea Coastal Investments, which was initially a joint venture between Mariner Financial and Babcock & Brown, was signed in April 2007.An application for the 106-unit development was declared a major project by Planning Minister Kristina Keneally in March.A preliminary assessment has been lodged and it is now being viewed by a number of agencies for comment, including Shellharbour City Council.