A deal is still possible, provided Optimum meets the coal terminal’s internal governance procedures. From Moneyweb.
Richards Bay Coal Terminal (RBCT) has hit back at Liberty Coal’s claims that it is being denied access to its export entitlement at the port terminal in a manner that it deems unfair and anti-competitive.
Liberty Coal, controlled by British businessman and former Gupta associate Daniel McGowan, is the new owner of Optimum Coal Mine (OCM) and the Optimum Coal Terminal (OCT) at Richards Bay. Both companies are in the process of exiting business rescue after six years.
Read: Optimum Coal to exit business rescue after six agonising years
Liberty Coal says the mine has shed 1,208 jobs since RBCT suspended OCT’s export entitlement, and more losses are likely unless the dispute is resolved. Its ability to export through Richards Bay is critical to the survival of the company, said Liberty Coal in a statement this week.
RBCT took issue with Liberty Coal’s framing of the dispute and the reasons behind placing a halt on its export entitlement.
Read: Optimum Coal’s relaunch halted by dispute over Richards Bay export entitlement
“The correct position is that Liberty Coal failed to meet a material suspensive condition to its indirect acquisition of the Shareholders’ Interest in RBCT, including the export entitlement of OCT,” says RBCT in response to Liberty Coal’s claims made earlier this week.
“The material suspensive condition, known to Liberty Coal since June 2021, required OCM to transfer its business and coal mines in full to Liberty Coal.”
RBCT goes on to say Liberty Coal had failed to implement several conditions required to regain its export entitlement:
- OCM has not transferred, and Liberty Coal is not the owner of OCM’s mining right;
- OCM has not transferred, and Liberty Coal is not the owner of OCM’s coal mines;
- Liberty Coal has not met the Section 11 ministerial conditions imposed on OCM and Liberty Coal in October 2021 under the Mineral and Petroleum Resources Development Act (Section 11 sets out the legal steps needed for the transfer of mining rights);
- Liberty Coal has not established a community trust or employee trust for historically disadvantaged South Africans (each trust is meant to own 5% of the issued voting Class V shares in Liberty Coal – which have different voting rights compared to other classes of shares);
- Liberty Coal has not issued voting Class V shares to its proposed BEE shareholder (which is required to be a historically disadvantaged South African and to own 20% of the issued voting Class V shares in Liberty Coal); and
- Liberty Coal has not issued non-voting Class A shares to the proposed ‘administrator’ as a nominee for OCM’s creditors.
Alternative solution proposed
RBCT says it considered Liberty Coal’s predicament and earlier this month proposed an alternative solution that would allow it full access to its export entitlement as early as March 2024, “subject to compliance with RBCT’s internal governance procedures, while OCM and Liberty Coal implement their transaction in full”.
The two parties met on 4 March 2024 to discuss the proposal, which is currently being considered by Liberty Coal, says RBCT.
Optimum Coal has been in dispute with RBCT since 2018 over several issues, including unpaid wharfage fees – which have reportedly since been settled. It remains a defaulting shareholder at RBCT without the right to use its export entitlement until the outstanding issues have been resolved.
