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Optimum Coal to be sold for a pittance to unknown shelf company

Coal News - Published on Tue, 11 Dec 2018

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Mining MX reported that OPTIMUM Coal Mine’s creditors have objected to a proposed sale of the mine to an unknown entity, Halo Projects, which they claim was a shelf company, and have asked the business rescue practitioners (BRP) to postpone a meeting to approve the transaction. In a letter to the BRPs seen by Miningmx, a representative for the creditors said Halo Projects appeared to be a front company, and that it was unlikely to win a mining licence from the Department of Mineral Resources (DMR) as a result. Kurt Knoop, one of the BRPs for Optimum Coal Mine, said in a text message to Miningmx that he had not received the creditors’ letter.

Among the creditors’ complaints are that the sale agreement with Halo Projects does not set out payment details for Optimum Coal Mine and that it seems to give preference to certain creditors over others; for instance, service providers appointed to restart the mine will be paid before existing creditors. Even the BRPs’s fee is given preference.

Critically, the creditors say Optimum Coal Mine, which also includes Koornfontein mine and an allocation at Richards Bay Coal Terminal (RBCT), has been under-valued. All in all, Halo Projects would pay R1 for the shares in Optimum Coal, and then a total of R600m over six months. However, this payment would be treated as post commencement finance which equated to a loan and not a purchase payment.

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Posted By : Nanda Koijam on Tue, 11 Dec 2018
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