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The business rescue plan of Mpumalanga’s Lily and Barbrook mines has suffered another setback after the high court ordered that the process be halted following another court application.
The application by Arqomanzi – formed by Siyakhula Sonke Corporation (SSC) and Taung Gold – seeks to get an order that will declare that Standard Bank lawfully ceded all of Vantage Goldfields SA’s loan claims, amounting to R389 million, to Arqomanzi and that all business rescue plans so far have failed.
Arqomanzi aims to be recognised as an independent creditor of Vantage Goldfields for the amount of R389 million.
The company also wants to get an order that twists the arm of business rescue practitioners – Rob Devereux and Daniel Terblanche – to call a meeting of all creditors to vote on whether to allow the practitioners to draw up a new business rescue plan or not.
Arqomanzi’s application will be heard on October 8.
“ …The fourth and fifth respondents [Devereux and Terblanche] are interdicted and restrained from implementing the business rescue plans, in whatever form, that was adopted by the creditors of the first respondent [Vantage Goldfields] on February 16 2017 and/or by creditors of the second respondent [Barbrook Mines Proprietary Limited) on August 6 2018 and/or by the creditors of the third respondent [Makonjwaan Imperial Mining Company] on May 25 2016,” reads the court order.
The legal fracas started when Vantage Goldfields cancelled a sale agreement with SSC’s subsidiary, Flaming Silver 373 (Pty) Ltd, and opted to sell 100% of its stake to Real Win Investments (Pty) Ltd.
Vantage Goldfields accused SSC of failing to produce proof of funds to reopen the mines, which cost R310 million. The business rescue practitioners’ report, however, indicated that SSC had provided proof and that it had said it was ready to reopen the mines.
The mines were shut down in February 2016 after an entrance to Lily Mine collapsed. Three workers plunged down in their container office while 75 of their colleagues were rescued.
After the cancellation of the sale agreement Arqomanzi made a solid offer amounting to R472 million, which would focus on reopening the mines, settling with creditors and ex-employees, halting the Lily Mine decline, upgrading plant and infrastructure, and creating much-needed employment opportunities.
Vantage Goldfields CEO Mike McChesney accused SSC chief executive Fred Arendse of delaying the process for two years.
“This is a court order brought by a man who cares so little for the distressed community. It is now two years of misrepresentation and delays by this man,” McChesney said.
Arendse could not be reached for comment.
Arqomanzi’s applications comes after the company got support from creditors and former employees.
Creditors have threatened to reapply for liquidation of the mines and support a company that produces proof of funds. Arqomanzi has given the proof to creditor while Real Win has not. Real Win has, however, preferred to give its proof to Vantage Goldfields and the business rescue practitioners.
Former workers have declared their support for Arqomanzi because they claim that the company had made concrete promises to re-employee them and retrieve the container office that got buried with their three colleagues. One thousand employees were laid off when the mines were closed.
Meanwhile, SSC’s application in the Mpumalanga High Court to force Vantage Goldfields to hand over share certificates and other documents is still pending.
Before this application goes ahead, the Supreme Court of Appeal has to rule if the high court decision’s to declare the sale agreement null and void was correct or not. Former SSC director Ferdi Dippenaar had argued that the board, which took the decision on the sale agreement, was not properly constituted.
The court did not take a position on whether Vantage Goldfields was right or wrong in unilaterally cancelling the sale agreement.
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