Publications
Partners
The company that had sealed an agreement to buy a 74% shareholding in Vantage Goldfields this month lodged an urgent court application to enforce the transfer of the shares and avert liquidation of the gold mining company.
Flaming Silver Trading 373 – a subsidiary of Siyakhula Sonke Corporation (SSC) – approached the Pretoria High Court on March 14 to force Vantage Goldfields to hand over the shares and other documents.
Vantage Goldfields owns the Lily and Barbrook gold mines in Louisville near Barberton in Mpumalanga.
The two mines have been under business rescue since the entrance to Lily Mine’s shaft collapsed on February 5 2016 – leaving three workers dead and buried underground.
Read: Families of trapped mine workers want rescue practitioner gone
Since Flaming Silver and Vantage Goldfields reached the agreement on November 1 2017, the shares have not been transferred.
This is despite the department of mineral resources’ approval of the transaction on December 21 2018.
This stalemate stalled the release of a R190 million loan from the Industrial Development Corporation (IDC) to Flaming Silver.
Vantage Goldfields sold its shares to Flaming Silver for R310 million, with R200 million to be paid in cash and R110 million in kind.
The business rescue practitioners, Rob Devereux and Daniel Terblanche, have also threatened to liquidate Vantage Goldfields because of lack of progress in the agreement or to look for other purchasers of the mines.
In the application, SSC CEO Fred Arendse demanded that:
- Law firm Hogan Lovells give effect to the written agreement concluded between Vantage Goldfields and Flaming Silver;
- Vantage Goldfields hand over share certificates to Hogan Lovells, as well as share transfer forms, for the law firm to facilitate the transfer of shares to Flaming Silver;
- Written resignations of the directors of Vantage Goldfields, Makonjwaan Imperial Mining Company (Mimco) and Barbrook Mines; and
- Hogan Lovells pay Vantage Goldfields the R9 million that it holds in trust.
“[The application] is brought on an urgent basis because [the business rescue practitioners] have threatened to apply for the liquidation of Vantage Goldfields, Mimco and Barbrook should the agreements between the applicant and first respondent (Vantage) not be carried out, or to look for other purchasers of the shares which are the subject matter of this application,” Arendse said in his founding affidavit.
Read: Lily Mine liquidator under fire
“Should that happen, the prospect of getting the three corporate entities (Vantage, Mimco and Barbrook) operational again, employing approximately 900 employees and generating revenue will be extremely remote and probably impossible,” he said.
Mimco owns Lily Mine and Vantage Goldfields is a 100% shareholder of Mimco.
Arendse added that if the shares were not transferred, his company would not have access to the IDC loan.
“As is apparent from letters from the business rescue practitioners and their attorney to the first respondent, the possibility of a liquidation application looms large.
“Business rescue proceedings are meant to be temporary and brief … the business rescue process in this matter commenced in 2016 and needs to be brought to an end.
“The applicant has concluded agreements and paid monies, along with SSC, to keep the mines alive so that they could be operated as going concerns once the business rescue process came to an end,” he added.
Flaming Silver’s application was lodged in reaction to Vantage Goldfields’ threat on March 13 to cancel the agreement because Flaming Silver had breached it. Vantage Goldfields CEO, Michael McChesney, gave Flaming Silver ten days to comply with the agreements they had.
McChesney said in a letter, that City Press has seen, that Flaming Silver had failed to secure the funding.
“At all relevant times,” McChesney wrote, “the purchaser (Flaming Silver) represented to the seller and assumed the obligation that the purchaser would obtain and/or procure sufficient equity capital and loans to meet the expectations of the IDC access and drawdown facilities made available by the IDC.
“Despite the IDC having made funding available to Vantage Goldfields for drawdown, the purchaser has at the date hereof failed to satisfy such requirements and remains unable to do so,” he added.
McChesney said that Flaming Silver had excluded Vantage Goldfields from engagement and had not taken it into its confidence regarding the terms of the IDC funding, other than to confirm that access to the funds required additional negotiation and agreement with the IDC.
“Should you fail to rectify your breaches within the said period, 10 (ten) calendar days of receipt of this communication, we will cancel the agreement without prejudice to our rights to claim damages suffered on account of your breach,” he concluded.
 |
| ||||||||||||
| |||||||||||||
