SA Investing

Moving beyond Guptas: SA mining assets attract R3.05bn bid, Oakbay opposes

Project Halo has submitted the winning bid of R3.05bn for three major assets of Tegeta Exploration & Resources, the Gupta family-linked mining company under administration since February.
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JOHANNESBURG — Finding closure is important in order to leave the past behind, and while South Africans would rather see the Guptas in orange overalls, moving forward is vital. At the heart of the state capture claims lies Optimum Coal, an asset forcibly sold by Glencore with the help of then Zuptoid mining minister Mosebenzi Zwane. The contracts were re-signed with Eskom, only once the sale had gone to the Guptas has gone through. Fast forward almost a year later, and these assets have been sold to the highest bidder, after being put into business rescue. Eskom may also breathe a sigh of relief, given the coal issues being bandied about as part of the load shedding problem, a functioning coal mine can only help. And let's not forget about the jobs that will be saved. And in usual Zuptoid fashion, Oakbay is opposing the deal. – Stuart Lowman

By Loni Prinsloo and Paul Burkhardt

(Bloomberg) – A South African consortium called Project Halo has submitted the winning bid of R3.05bn ($215m) 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 R2.8bn, Koornfontein Mines (Pty) Ltd. for R200m and Optimum Coal Terminal (Pty) Ltd. for R50m, 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 centre 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.

Must read: How world sees SA: Guptas pulled levers of State to grab Glencore's Optimum

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 R600m 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.

Eskom
state capture
coal
Guptas
BNT5
Tegeta

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