Project Halo Stakes Claim to Buy Guptas' Optimum Coal Mines
(Bloomberg) -- Project Halo, a South African group that bid 3.05 billion rand ($229 million) for Tegeta Exploration & Resources (Pty) Ltd.’s coal assets after it was placed under administration, said it expects the deal to go ahead and it’s unaware other offers will be entertained.
“As things stand today we are the preferred bidder,” Project Halo Director Paul Buckley told an IHS Markit coal conference in Cape Town on Thursday. “We haven’t been notified that the process has been reopened.”
Optimum was a leading supplier of coal to state power utility Eskom Holdings SOC Ltd. Glencore Plc sold Optimum to Tegeta Exploration and Resources in 2015, and it was placed under business rescue last year after Eskom refused to renegotiate what it said was an unprofitable supply contract and issued penalties.
Miningmx reported on Monday that while formal bidding for Optimum had closed, its administrators were considering the possibility of additional offers at the request of creditors and labor unions. Eskom wants Optimum’s new owner to be able to guarantee it a long-term supply of coal, and the utility could ultimately determine who gets to buy it, Louis Klopper, one of the administrators, said by phone on Thursday.
Tegeta was owned by members of the Gupta family, who stand accused of using their friendship with former President Jacob Zuma and his son Duduzane to secure business contracts. They all deny wrongdoing.
Project Halo offered to buy Tegeta’s 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.
Buckley said he and three partners had secured full funding from an international bank -- which he declined to identify -- to buy Optimum and had complied with all the required legal processes. Optimum’s creditors were supposed to vote on the offer in December but their meeting had been postponed, he said.
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