Another court battle is looming in the drawn-out business rescue process of Mpumalanga’s Lily and Barbrook gold mines after business rescue practitioner, Rob Devereux, was accused of doing a “180-degree turn” on publishing plans in favour of a company that has been waiting on the wings to buy the mines.
Arqomanzi appeared likely to acquire the mines from Australian company, Vantage Goldfields (VGO), after making a R250 million offer to Devereux, and becoming the major independent creditor of VGO’s subsidiary, Vantage Goldfields SA (VGSA), after convincing Standard Bank to cede VGSA’s loan of R389 million to the company.
Devereux was expected to draft new business rescue plans based on Arqomanzi’s offer on January 20 for creditors to vote on but has changed his mind after VGO sold its 98% stake to Macquarie Metals and announced that it was now no longer selling and was ready to re-open the mines.
Lily and Babrook mines, situated in Louisville near Barberton, were shut down and placed under business rescue following the collapse of the entrance to Lily Mine in 2016 that left three workers trapped underground. Their bodies were never recovered.
Arqomanzi’s director, Neil Herrick, told City Press this week that Devereux had published unilateral amendments to the business rescue plans despite telling creditors that he would publish amended plans and allow creditors to vote on them.
“They (Devereux and another business rescue practitioner, Daniel Terblanche) have unilaterally amended approved plans in a way which is massively prejudicial to us.
“We will be taking urgent steps to seek interim relief, protect our rights and stop the business rescue practitioner’s prejudicial actions,” Herrick said.
Arqomanzi has accused VGO of using underhanded tactics in its dealings with Macquarie. The company also accuses Devereux and Terblache of defying a court order to draft new plans and allow creditors to vote on them.
In a letter dated February 11 that Herrick wrote to the creditors, he said that Arqomanzi had conducted its own independent research into the credentials of Macquarie and that Macquarie’s chairperson, Alan Doyle, had misrepresented the company’s credentials when he said its major shareholders were a Sydney-based investment banking company and a Singapore-based metals trading company.
He said that the real truth was that Doyle and VGO chairperson, Steven Turner, through Afro Pacific Holdings acquired 98% of VGO.
“Turner did not disclose to the business rescue practitioners that he, in his personal capacity, actually controls Afro Pacific Holdings, which in turn holds 100% of Macquarie.
“The reality is that, based on Australian Securities and Investment Commission’s record, Turner and Doyle, through Afro Pacific and Macquarie Metals, acquired 98% of VGO,” Herrick said.
Devereux told City Press that he took Macquarie’s offer because creditors would be paid in 60 days rather than in 12 months as Arqomanzi had proposed.
“Macquarie’s offer is significantly better. My job is to save the company. Imagine if I go to creditors and say I’m giving them a plan that gives them R0.05 on the rand instead of a plan that gives them R1. Macquarie will pay 65% of approved claims within 15 working days and the balance within 60 days and they will the re-open the mines,” said Devereux.
He said accusations that he delayed publishing plans based on Arqomanzi’s offer could only be confirmed by a court.
The business rescue practitioners have been failing to get investors since 2016. Possible deals with Canadian companies, Afro-Can Resources and Galane Gold, fell through in 2017.
Then Siyakhula Sisonke Corporation’s (SSC) subsidiary, Flaming Silver, also had an interest to buy 74% of Vantage Goldfields SA but the matter ended up in court as the deal fell through.
Real Win Investment also came in but failed to produce proof of funds. Arqomanzi’s attempt has also been fraught with intense fighting and maneuvering as VGO has been unwilling to sell to any company linked to SSC chief executive officer, Fred Arendse.
SSC is part of Arqomanzi.