Johannesburg - Creditors of Glencore’s Optimum Coal Mine will on Friday probably approve a plan to sell it to Tegeta, a company controlled by President Jacob Zuma’s son Duduzane and the Gupta family, according to an administrator of the business rescue team.
The approval, if not stopped by opposition from labour unions and other groups, will seal the R2.15bn sale of loss-making Optimum to Tegeta Exploration & Resources, a company in which both Duduzane Zuma and members of the Gupta family have indirect interests.
Investec, FirstRand’s Rand Merchant Bank and Nedbank which collectively hold about R2.7bn in Optimum debt, will approve the sale, according to a person with knowledge of the matter, who declined to be identified because the matter is not yet public.
“I’d be very surprised if it wasn’t approved,” Piers Marsden, who has been managing the so-called business rescue process since Glencore sought bankruptcy protection for Optimum in August, said by phone on Thursday. Marsden drew up the March 31 plan the creditors will vote on.
Glencore put Optimum into business rescue after Eskom refused to amend a loss-making coal supply contract and reduce a R2bn fine. While the holding company will be released, the mine itself will remain in business rescue until Tegeta can show that it can run it profitably, Marsden said.
“That is the million dollar question,” Marsden said. “It’s not for today.”
Money and coal
Eskom said that it will not amend Optimum’s supply contract or penalty.
“Whatever happens we don’t want to be put in a situation when we’re not going to get our money and the coal,” Eskom spokesperson Khulu Phasiwe said by phone. Marsden confirmed that the contract and penalty would remain in place.
Tegeta issued shares to Duduzane Zuma’s Mabengela Investments three weeks before the sale was announced. The ruling African National Congress is investigating the Gupta family - friends of President Zuma’s - after Deputy Finance Minister Mcebisi Jonas last month claimed the three brothers had offered to promote him to the finance minister’s job. They deny the allegation.
Mines Minister Mosebenzi Zwane has been criticised by opposition politicians saying that he told Glencore CEO Ivan Glasenberg to do the deal with Tegeta.
Tegeta says the minister had no influence over the deal and wasn’t involved in negotiations.
The Mines Ministry has approved the sale, clearing the final regulatory hurdle, Marsden said. Ministry spokesperson Martin Madlala wasn’t immediately available to comment. A spokesperson for Glencore declined to comment.
It will take about 10 days after the vote to close the deal, Marsden said.