The wheel has turned in favour of a bidder who wants to acquire two Mpumalanga gold mines from an Australian company after the Mpumalanga High Court in Mbombela found that business rescue practitioners were wrong not to publish adopted business plans based on its offer.
Arqomanzi (Pty) Ltd turned to the court after business rescue practitioners of Lily and Barbrook Mines, Rob Devereux and Daniel Terblanche, decided against publishing business plans based on its R250 million offer. The pair instead opted to publish plans in favour of Australian company, Macquarie Metals, which bought 98% of Vantage Goldfields (VGO), the owner of the mines.
This, and other litigation, have now delayed the re-opening of the mines since they were shut down in 2016 after an entrance to Lily Mine collapsed and buried three workers - Yvonne Mnisi, Pretty Nkambule and Solomon Nyirenda - who were working in a container office.
Arqomanzi is an entity formed by Siyakhula Sisonke Corporation (SSC) subsidiary, Flaming Silver 373 and Taung Gold. SSC has been involved in prolonged litigation with VGO’s South African subsidiary, Vantage Goldfields SA (VGSA), and it is now an open secret that VGSA has been unwilling to sell to any entity associated with SSC.
Vantage Goldfields decided against selling Lily and Barbrook mines in Louisville outside Barberton when it regained some financial muscle after selling its stake to Macquarie Metals.
The business rescue practitioners were expected to publish plans in favour of Arqomanzi’s bid in January and allow creditors to vote but changed their minds when VGO sold its stake to Macquarie.
Mpumalanga High Court Judge President Francis Legodi, made an order that:
- The business rescue practitioners cannot unilaterally amend the previously adopted business rescue plans;
- The business rescue practitioners could not ignore the court order granted November 11 2019, which directed them to publish business rescue plans based on Arqomanzi’s offer; and
- Any new offer should be subjected to compliance with legislative framework.
“In the course of considering the issues in this matter as those issues were argued, one was placed with sufficient facts to locate the inordinate delay that had unfolded since the three companies were placed under rescue proceedings. Better measures must be put in place in the form of a court order that would ensure that further unnecessary delays are averted,” Legodi said.
“In my view, the business rescue practitioners could have done better to avoid the long delays,” he added.
Until January, Arqomanzi was the frontrunner to acquire the mines, as it was the only company that tabled a firm offer to Devereux as business rescue practitioner.
Since the closure of the mines, many potential investors have withdrawn for various reasons, but SSC has been consistent in their bid.
SSC initially bid to buy the mines through its subsidiary Flaming Silver. Flaming Silver then partnered with Taung Gold to form Arqomanzi and launched the R250 million bid. Arqomanzi then became a major independent creditor of VGO’s subsidiary, VGSA, after convincing Standard Bank to cede VGSA’s loan of R389 million to the company.
Based on Arqomanzi’s offer of R250 million, Devereux was expected to draft a new business rescue plan that would be voted on by creditors.