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JOHANNESBURG — Less than 24 months after the Guptas controversially acquired Optimum Coal (previously owned by Glencore) for R2.1bn, Oakbay is now selling its Tegeta mining business to little-known Swiss-based company, ‘Charles King SA’, for R2.97bn. Of course, Oakbay’s bid to acquire Optimum, which forms part of Tegeta, was mired in controversy from the very beginning. One just needs to think back when Mineral Resources Minister Mosebenzi Zwane and former Eskom CEO Brian Molefe put pressure on Glencore regarding a R2bn fine for Optimum. Glencore then placed the company in business rescue, while practitioners put the company up for sale. The Guptas then snapped it up, but they, in turn, received help from Eskom who advanced them over R500m to “secure” future supplies from the Guptas’ newly acquired mine. This money would be used to help the Guptas buy Optimum, in essence becoming like a loan from Eskom. Oakbay, upon acquiring Optimum, also promised to pay the fine; Eskom further said it was intent on still pursuing the full penalty amount despite the change in ownership. But what made the Optimum deal stink, even more, was Eskom subsequently moved to give Oakbay a massive discount on the fine behind closed doors earlier this year when Business Day reported that Oakbay only paid a R500m settlement. A key player in this discounted settlement was Gupta Lieutenant Mark Pamensky who was also previously on the Eskom board while working for Oakbay. The fact that the Guptas have now sold Tegeta to Charles King SA, poses yet more questions as a Google search for the company reveals hardly any results and seemingly no website. The deal also comes after the Guptas ‘sold’ their media businesses to Mzwanele Manyi via vendor financing. One has to ask: What exactly is going on here? – Gareth van Zyl
Press release from Oakbay:
Oakbay takes another decisive action to save employees’ jobs
Oakbay Investments (“Oakbay”) today announced that it has reached an agreement to sell its Tegeta Exploration and Resources business (“Tegeta”).
Tegeta, comprising Optimum, Koornfontein and the Optimum Coal Terminal, has recently seen a radical transformation in its fortunes. Emerging from business-rescue less than a year ago, the three businesses are now set on a sustainable and profitable trajectory.
– In order to preserve the employment of its loyal staff, Oakbay has agreed to the sale of Tegeta to the Swiss-based Charles King SA for R2.97bn.
– The sale is subject to regulatory requirements and the fulfilment of the conditions in the agreement which are expected to be concluded within 12 months.
– Oakbay has stipulated that the purchaser safeguards employment in the mines. Additionally, the agreement has stipulated that the purchaser must have a minimum of 30% of the shares allocated to a Black Empowerment Partner.
Some more info on Charles King SA. pic.twitter.com/e2rZLtY6Jw
— Lezanne (@Lizira00) August 23, 2017
The sale is part of Oakbay’s commitment to preserve jobs, provide certainty to over 7500 hard-working employees throughout the Group and to safeguard the inherent value of the businesses in which they work. Under new ownership, Oakbay believes that the business and its employees will have the bright and prosperous future they deserve. The sale will also allow the shareholder the time to focus on clearing its name in the face of unfounded media allegations.
A simple Google search shows that this Charles King SA the Guptas claim to be selling Tegeta for R2,9bn to doesn't really "exist".
— #SinuousLinesDesign (@Sentletse) August 23, 2017
Commenting on the agreement, Ronica Ragavan, Acting Chief Executive of Oakbay, said:
“The sale of Tegeta represents a further step forward in delivering our strategy of preserving jobs by securing the future of the business we have developed and grown. Tegeta is a strong business and the Charles King company will be an excellent new owner. We wish both of them well for the future.”
Commenting on the agreement, Mr Amin Al Zarooni, the owner of Charles King SA, said:
“Opportunities in mining in South Africa are extremely attractive and we have been looking for a long time to invest in the Rainbow Nation. And once we have bought the business we will, of course, be lokking for a Black Economic Empowerment Partner. Mining is an excellent growth sector on the continent and with this acquisition, our expansion plans on the African continent kick starts.”
Guptas’ Oakbay to Sell Tegeta for $244 Million to Charles King
On Monday, Oakbay said it’s selling media interests to a company controlled by Zuma ally Mzwanele Manyi for 450 million rand and that it will be financing the sale to Manyi’s Lodidox, which was registered on June 23, on “acceptable terms.” Bank of Baroda, the last bank that’s offering services to the Guptas companies, is in the process of closing Oakbay’s accounts after South Africa’s four biggest lenders shut them last year, citing reputation risk and regulatory concerns.
The Guptas had warned that about 7,500 jobs are at risk should the accounts be closed.
In a November report, the nation’s graft ombudsman accused Zuma of allowing members of the Gupta family to influence cabinet appointments and the award of state contracts. Zuma and the Guptas deny wrongdoing.