Unnamed company to help run Gupta mines
The Gupta-owned Optimum and Koornfontein mines will be run with help from a “reputable entity in the mining industry”
The Gupta-owned Optimum and Koornfontein mines will be run with help from a “reputable entity in the mining industry” for the foreseeable future in the latest move by business rescue practitioners to circumvent the closure of their bank accounts.
In a letter addressed to the creditors of the mines‚ business rescue practitioners Kurt Knoop and Louis Klopper asked that the deadline for publishing the business rescue plans be extended to April 23.
But they highlighted a solution to secure banking facilities‚ after the Bank of Baroda stopped all account activity on March 31.
The Indian bank announced in February that it was closing shop in South Africa.
“The immediate and critical impediments that faced the practitioners were the potential to become unbanked by March 31 and the lack of sufficient cash flow for the entity to continue trading unhindered in the ordinary course‚” the letter read.
The third party‚ as yet unidentified‚ has entered into a service level agreement with the practitioners‚ “the terms of which assist with the facilitation of an efficient management of the business operations along with transactional banking facilities for the foreseeable 12 months”‚ according to the letter.
Additionally‚ a 12-month export coal supply agreement has been concluded for a minimum of 200 000 tons of premium coal.
An 80% pre-payment on the deal which ensures a significant cash injection for the company will also be paid on April 6.
The deadline extension will allow the practitioners to draft a detailed plan setting out the cash flow projections and proposed repayment of debts.