Gupta's South African Mining Assets Attract $215 Million Bid
(Bloomberg) -- A South African consortium called Project Halo has submitted the winning bid of 3.05 billion rand ($215 million) for three major assets of Tegeta Exploration & Resources (Pty) Ltd., the Gupta family-linked mining company under administration since February.
Project Halo will buy Optimum Coal Mine (Pty) Ltd., for a maximum of 2.8 billion rand, Koornfontein Mines (Pty) Ltd. for 200 million rand and Optimum Coal Terminal (Pty) Ltd. for 50 million rand, according to the term sheet seen by Bloomberg. Bouwer Van Niekerk, a lawyer for the business rescue practitioners, confirmed the winning bid.
Optimum supplies coal to Eskom Holdings SOC Ltd., the state-owned power utility at the center of an official investigation into claims that members of the Gupta family used their friendship with former President Jacob Zuma and his son Duduzane to secure business contracts. They all deny wrongdoing.
Glencore Plc sold Optimum to Tegeta Exploration and Resources in 2015, and it was placed placed under business rescue after Eskom refused to renegotiate what it said was an unprofitable coal-supply contract and issued penalties.
Halo, with directors who include Mbongiseni Duma and Paul Buckley, will also provide 600 million rand financing over the next six months to ensure continued business at the Tegeta operations in Mpumalanga province and the Richards Bay Coal Terminal, according to the term sheet.
The deal is opposed by Oakbay Investments (Pty) Ltd., another Gupta-linked company, which has also applied to the Pretoria High Court to remove the business rescue practitioners, Kurt Knoop and Johan-Louis Klopper. Oakbay argues they “are conflicted as business rescue practitioners, holding the same positions in Tegeta, Optimum Coal, Koornfontein and Optimum Coal Terminal.”
©2018 Bloomberg L.P.