Rescue team waits for the optimum proposal
Bouwer told the portfolio committee on mineral resources and energy that the BRPs believed the alternative proposal would convert debt into equity.
“Exactly how that will be structured we are unsure of. We will give clarity during the course of this week. When we receive the proposal, it will put us in a position to publish a business rescue plan,” said Van Niekerk, adding that the publication of the business plan depended on what transpired during the course of this week.
Optimum, which is owned by Gupta-linked Tegeta Exploration and Resources, was placed under business rescue two years ago following the closure of the company’s bank accounts by South Africa’s biggest banks.
The mine’s 550 permanent employees and 1 938 contractors were placed on special leave in December 2018 and their employment contracts were terminated last April. A month later the colliery was placed under care and maintenance.
Van Niekerk said the mine had re-commenced mining last November and currently employed around 80 contractors, who were mining a mini-pit.
He predicted that more than 120 former employees would be recalled by August to mine an additional two mini-pits.
Van Niekerk also said that the BRPs had gone through more than one sales process over the past two years.
“Currently, as we sit here, there are three bids on the table. The difficulty that the company, practitioners and everybody faces is the assurances regarding the funding of the mine,” Van Niekerk said.
He said Optimum was a big mine and required financial muscle in order to ramp up to production.
“In the current market, there are very limited players who have the capital to acquire an asset of this size. The arrival of Covid-19 has made it more problematic,” Van Niekerk said.
Optimum was previously owned by Glencore. The global minerals and metals company was a major supplier to Eskom’s Hendrina plant.
However, lawmakers said they were running out of patience with the business rescue process of the colliery.
Portfolio committee member Mthokozisi Nxumalo said the committee was not convinced that the business rescue was yielding results.
“My worry is each time we have BRPs they seem not to be rescuing the business they are supposed to be rescuing. The process is all about them continuing to receive revenue from the business they are rescuing. It does not bring any results. We must start to debate their existence and why we put business rescue into state entities,” said Nxumalo.