Sale of Optimum Coal to Tegeta concluded

The joint business rescue practitioners of Optimum Coal Holdings announced on Thursday that all outstanding obligations in respect of the sale of the assets of Optimum Holdings to Tegeta Exploration & Resources had been performed and that the transaction would become effective on April 15.

Joint business rescue practitioners Piers Marsden and Peter van den Steen said the conclusion of the transaction would result in the termination of the business rescue proceedings.

“Optimum Coal Mine will operate as a going concern under the operational control of the business rescue practitioners until the practitioners are satisfied that Optimum Coal Mine is no longer financially distressed,” they said in a statement.

In December, it was announced that Tegeta had concluded a conditional R2.15-billion transaction to buy all of the assets of Optimum Coal Holdings, which Glencore placed into business rescue in August 2015.

The announcement raised concerns, owing to Tegeta’s association with Oakbay, which itself had links to the Gupta family and President Jacob Zuma’s son, Duduzane Zuma.

Subsequently, some banks moved to terminate business relationships with Oakbay, which resulted in nonexecutive chairperson, Atul Gupta, and Oakbay CEO, Varun Gupta, resigning as directors on April 8. In addition, Duduzane Zuma resigned as a nonxecutive director of Shiva Uranium, an Oakbay subsidiary.

On the same day, the majority of creditors adopted the business-rescue plan at a meeting of affected parties in Johannesburg.

The Optimum business rescue plan covered the Optimum coal mine, the Optimum coal terminal and Koornfontein Mines. Koornfontein Mines was not in business rescue, but had a contract to supply coal to Eskom’s Komati power station until the end of 2015.

Eskom had indicated that R2-billion in penalties raised against Optimum when it was still owned by Glencore would not be withdrawn and that there would be no discussions about coal supply to the Hendrina power station beyond 2018.

The State-owned utility also insisted that its R150/t fixed-price contract with Optimum remained intact.

In a notice to shareholders, JSE-listed Oakbay Resources and Energy said it was not directly party to the agreement between Tegeta and Glencore to acquire Optimum.

In February, Oakbay Resources and Energy, through its 74%-owned subsidiary Shiva Uranium, acquired the business carried out by Tegeta.

However, the company stressed that 'Oakbay Resources and Energy Limited' should not be confused with 'Oakbay Investments Proprietary Limited', with Oakbay Investments being a shareholder in Oakbay Resources and Tegeta a subsidiary of Oakbay Investments.

“Accordingly, Oakbay Resources confirms that it is not a party to the acquisition of the Optimum Coal group of companies as reported by the media.”