The rescue process has been mired for four years in mostly technical court challenges. From Moneyweb.
Business rescue practitioners (BRPs) for Vantage Goldfields say they need R1 million to cover operational, security and legal costs or they will have to approach the court to start winding up Vantage Goldfields, Barbrook and Mimco.
The three companies were placed in business rescue after a support pillar at Lily Gold Mine in Mpumalanga collapsed nearly eight years ago, claiming the lives of three workers.
Read: Some light at last for Barbrook and Lily gold mines
In a note to creditors this week detailing nearly four years of litigation between the two bidding parties – Arqomanzi and Vantage Goldfields SA (VGSA) – the BRPs say Vantage is no longer willing to fund the monthly operational expenses as it has been doing unless the business rescue plan is implemented in its current form. This would effectively exclude its rival Arqomanzi, the largest creditor, from having any say in the outcome of the proceedings.
The BRPs say there are parties willing to provide post-commencement funding and there remains a reasonable prospect of rescuing the companies, but they cannot continue to fund the operational, security and legal costs of the companies.
The rescue has been mired for four years in mostly technical court challenges in the Mpumalanga High Court and the Supreme Court of Appeal. Vantage, backed by Australian group Macquarie Metals, challenged Arqomanzi’s acquisition of loan claims from Standard Bank totalling about R579 million, which made it the largest creditor. Arqomanzi is backed by Hong Kong investors.
Read:The 1 000-night vigil for buried mine workers [Jan 2022]
Rescue of Barbrook and Lily gold mines ‘cries out for finality’ – SCA [Jan 2023]
It’s been a bitter and protracted battle, with claims that Vantage provided the BRPs with a forged proof of funds letter from HSBC. This was denied by Vantage, though a criminal case has been lodged with the SA Police in Mpumalanga.
‘Devastating’ betrayal
Responding to the latest threat to liquidate the companies, Arqomanzi sent a letter of its own to creditors this week, calling the threat a “devastating act of betrayal to the long-suffering families” of the three miners still trapped underground following the collapse of the support pillar.
Arqomanzi CEO Neill Herrick says there are now five court judgments in its favour, yet the BRPs have yet to follow the court rulings and implement the amended business plan (which makes Arqomanzi the largest creditor, and therefore gives it the biggest vote over the outcome).
Vantage is taking the last SCA decision on appeal to the Constitutional Court, which will further delay the rescue proceedings.
The BRPs’ circular to creditors is an invite for urgent post-commencement funding to allow it to continue the rescue proceedings. Failing that, “it appears that termination of the business rescue proceedings and provisional liquidation of VGL, Barbrook and Mimco is unavoidable”.
Arqomanzi says it is willing to consider providing post-commencement financing if the BRPs comply with the orders of the court already issued.
That means it must update the creditors schedules to reflect Arqomanzi as the largest creditor, publish the amended business rescue plans, and put it to creditors for a vote.
