JOHANNESBURG - The role of the business rescuer at the embattled Lily and Barbrook mines has been brought into question with the Industrial Development Corporation (IDC) withholding its badly needed funding due to wrangling between parties.
The IDC provided funding conditions for R190 million precedent to a mining consortium kick-starting mining operations at the mothballed Lily and Barbrook mines. Zama Luthuli, the divisional executive for corporate affairs at the IDC, said the financier had not disbursed its commitment pending Department of Mineral Resources’ (DMR’s) approval.
“The wrangling among interested parties is a considerable threat to the re-opening of the mine – whose commencement of operations is also subject to DMR approval,” Luthuli said.
Some of the conditions attached to the loan are that the company furnish the IDC with the Memorandum of Incorporation and copies of subscription and shareholder agreements.
The company is also required to provide the DMR with confirmation that the mining rights are still valid and in place among other obligations to the DMR. The DMR could not be reached for comment.
The multimillion rand loan was granted to Vantage Goldfields, which owns the mines near Louieville outside Barberton in Mpumalanga. Little known empowerment company Siyakhula Sonke Empowerment Corporation has entered into a binding agreement to acquire 74 percent of Vantage Goldfields.
Vantage Goldfields was forced to close down Lily Mine when the entrance to its shaft collapsed in February 2016.
Three workers were buried underground. On December 2016, Robert Devereux of Strategic Turnaround was appointed as business rescue practitioner of Barbrook Mines.
Dwaine Koch of the Barbrook Creditors Committee has accused the business rescue practitioner of delaying tactics.
“The business rescue practitioner misled us and only circulated an amended business rescue plan on July 23, 2018, and scheduled voting one day before our provisional liquidation application, self-evidently desperately trying to postpone our application again,” Koch said.
Stevridge, trading as S&B Mining Consultants, has brought a liquidation application against the company on the basis that there is no prospect of rescuing the business. However, Devereux is adamant the business rescue process will succeed if given a chance and would save jobs.
“Employees that would be retrenched under business rescue will receive full retrenchment packages.
First payments will be made as funds are made available,” Devereux said. “In liquidation employees would be entitled to receive a maximum of R28 000 per staff member to the extent that there are funds available. The estimated impact on the closure of the mine is 7 000 persons”.
According to the business rescue plan seen by Business Report, a payment of R11.2 million will be made to creditors by the end of November, while a further R11.2m will be made by the end of March next year.
The team of business rescue personnel led by Devereux has been raking in thousands of rands in weekly fees. Devereux’ bill amounts R2 000 per hour up to a maximum of R25 000 per day, while Gert Holtzhauzen also charges R2 000 per hour up to a maximum of R25 000 a day and Henco Kruger charges R1 500 per hour.