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BL Premium reports that the rescue of the Gupta-owned Optimum Coal Mine can now commence in earnest after creditors voted overwhelmingly on Monday in favour of a new business rescue plan.
Lawyers for the business rescue practitioner (BRP), Bouwer van Niekerk, said 87% of the creditors voted in favour of the plan, allowing it to be implemented. “In essence, it envisages a debt-to-equity conversion of the creditors’ debt to take up shares in a new company to be formed, and for the mining assets and the business of the mine to be transferred to that company, as well as a capital injection to start up the mine again,” Van Niekerk said. Such capital injection is expected to be anywhere from R300m to R500m. Optimum Coal, which includes a valuable coal export allocation at Richards Bay, was put into business rescue on 19 February 2018, along with seven other Gupta-linked businesses. Optimum’s rescue process was initially frustrated by a flood of litigation, often from Gupta associates, and later efforts to sell the business were hindered by the depressed coal market coupled with the acquisition cost of such a large coal operation. Affected parties will now be able to choose whether they want their debt converted to equity or whether they want to be paid out. Van Niekerk said the turnaround plan would not happen overnight, but the vote showed that the majority of the affected people have faith in the mine being rescued.
- Read the full original of the report in the above regard by Lisa Steyn at BusinessLive (paywall access only)
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