A glimmer of hope is in sight for Optimum
They have been handed a lifeline by Burgh Group Holdings through its operations division Ezimbiwayo Consulting.
There is a glimmer of hope for Optimum and Koornfontein mines.
They have been handed a lifeline by Burgh Group Holdings through its operations division Ezimbiwayo Consulting.
Optimum and Koornfontein mines and coal terminal operations went under business rescue on February 20 as a result of the Bank of Baroda announcing its withdrawal from South Africa effective on March 31.
“All efforts to secure transactional banking facilities for these entities were unsuccessful as the commercial banks remained concerned about their reputational risk. This necessitated the business rescue practitioners entering into a management agreement with the Burgh Group Holdings,” said Louis Klopper Senior Business Rescue Practitioner at Coronado Consulting Group.
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Chief operating officer of Burgh Group Holdings Mr Ross Robertson during a meeting with creditors on April 11 said these operations are in desperate need of TLC, management and a significant cash injection.
He explained their turnaround strategy, “First on the agenda is to sell the stockpiles urgently, which is estimated to result in revenues of R 135 million. The first R35 million shipment is already being trained. All salaries and wages are guaranteed, we are getting contractors back on site, and we are addressing the needs of critical suppliers and critical material needs.”
The three hurdles Ezimbiwayo Consulting had to clear was selling the stockpile, pay Transnet Freight Rail R54 million owed to them and R16 million to Richards Bay Coal Terminal for suspended coal terminal membership.
The management agreements are expected to last for a 12-month period, after which the business rescue practitioners expect the mines to be rehabilitated and fully operational.
