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We won bid for Gupta mines 'fair and square' - new owners

Jan 15 2019 19:57
Sibongile Khumalo

Project Halo, the consortium which won a bid for the mines owned by Tegeta Exploration & Resources, has rejected allegations of impropriety in the process to secure the assets.

In December, the consortium put forward R3.6bn for Optimum Coal Mine, Koornfontein Mine, and Optimum Coal Terminal, previously owned by a company linked to the Gupta family.

"Let it be stated clearly that we won the bid fair and square, based on our sound business proposal, which was assessed by the Business Rescue Practitioners as the best plan presented to them," said Project Halo Director, Paul Buckley.

The consortium said in a statement it had declared its expression of interest in the assets in March 2018, putting down a deposit of R250m, as per Business Rescue Practitioners procedure, towards the end of 2018.

The mining company had been under administration since February, after the firm ran into financial difficulties, leaving workers unpaid.

Buckley dismissed allegations that the consortium was linked to the Gupta family, saying it pegged its bid at R3bn "based on what we believe the company is worth".

"The reality is that the assets under bid used to be part of the Tegeta Group, controlled by the Guptas. The assets were put into business rescue by the Gupta family after its access to cash dried up, following the withdrawal from South Africa of the only bank that would still offer banking facilities, India’s Bank of Baroda," he said. 

'Hitting the ground running'

The assets would be Project Halo’s first entry into coal mining, although individual directors have a wealth of experience in mining, finance, shipping and general logistics, it said.

Directors Mbongiseni Duma, Buckley, Julian Kidd and Nkanyiso Buthelezi hold 40% shares in the company, while 20% is in the hands of an A-rated financial institution which provided initial funding. The rest in split among workers, community, women's groups and other investors, according to the statement.

The consortium said it was focused on "going through the final stage of the process with the creditors and then [would] immediately hit the ground running, paying particular attention to the workers".

According to a Bloomberg report, Halo would also provide R600m financing over the next six months to ensure continued business at the Tegeta operations in Mpumalanga province and the Richards Bay Coal Terminal, according to the term sheet.

Optimum supplied coal to Eskom, and the awarding of the tender was embroiled in allegations that it did not not follow proper processes. 

The new owners of the mine said their focus would shift to restoring mining operations to a normal state; addressing concerns and issues with clients, including Eskom; and settling outstanding balances with creditors, among other key issues.

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