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Plan to rescue Gupta businesses revealed

Feb 26 2018 11:51
Jean le Roux

Cape Town – Business rescue practitioners appointed to oversee several beleaguered Gupta-linked companies have outlined their plans for the assets of the companies involved.

This includes securing funds from existing debtors and the disposing of assets.

It was announced in a press release on Monday that Johan Louis Klopper and Kurt Rupert Knoop have been appointed as the business rescue practitioners.

On February 16 2018, eight Gupta-linked companies resolved to appoint the two on several Gupta companies that filed for business rescue last week.

The companies include Tegeta Resources, Optimum Coal Mine and Shiva Uranium.

Two of the Guptas' asset-holding companies, Confident Concepts and Islandsite Investments, have also filed for business rescue.

Confident Concepts and Islandsite Investments 180 own the majority of the Guptas' property, including their "Saxonwold-lite" Constantia home, and the now-abandoned Sahara offices in Midrand.

Klopper and Knoop said their primary objective is to keep the companies operating while simultaneously securing jobs of the affected employees.

"We are exploring various options to maintain the trading ability of the entities while keeping in mind the preservation of all creditors' rights. Since the receipt of our licences on Friday, we have engaged with various stakeholders inclusive of the various employees' unions and representatives," read the statement they issued.

Their efforts include ensuring workers are paid for the month of February. Earlier this month, employees at Optimum Coal Mine downed tools, demanding to know whether they would be paid at the end of the month.

They confirmed that Optimum has a potential penalty liability to the tune of R104m, after it failed to meet its contractual coal delivery targets to the power producer. This prompted Eskom to withhold another R54m owed to Optimum, crippling its cash flow and jeopardising salary and creditor payments.

Knoop and Klopper indicated they have since secured alternative funding from other debtors, alleviating cash flow issues. Payments to employees and creditors should be finalised by February 28 2018.

From March 5 they intend engaging with stakeholders in a transparent manner.

By this time they hope to have analysed the businesses and identified non-performing and dormant assets for disposal. The proceeds from this disposal will be used to settle outstanding debts with the companies' creditors.

The practitioners plan to release further information as matters unfold.

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