Liberty Coal has welcomed a ruling by the Pretoria High Court which approved an order for settlement that will allow the Optimum Coal Mine (OCM) to exit business rescue, trade as a going concern, and to begin the process of rebuilding the mine.
This follows a joint approach by OCM and its employees, the National Prosecuting Authority (NPA), Liberty Coal, and other vested parties to the Pretoria High Court to request an expedited forfeiture hearing for an agreement involving a structured forfeiture of property. The NPA’s application, via the National Director of Public Prosecutions (NDPP), was supported by OCM’s curator, business rescue practitioners, the National Union of Mineworkers, Templar, and Liberty Coal.
According to the settlement, Liberty Coal will pay a total R461.7 million to the state in place of the confiscation of property under the Prevention of Organised Crime Act (POCA). Of this, R100 million will be paid immediately, and the remaining balance paid over two years. All funds will be overseen by an independent administrator and will be distributed to eligible creditors.
In terms of the OCM business rescue plan, the mine’s business, assets and compromised liabilities will be transferred from OCM, the former Gupta-owned company, to Liberty Coal, cutting all remaining links with the Guptas. Thereafter, Liberty Coal will become responsible for repaying outstanding creditors and recapitalising the mine.
Liberty Coal has stressed that the settlement is concluded purely for commercial reasons and the fact of the settlement is not to be construed as an admission of guilt or liability.
Ulrich Bester, Director of Liberty Coal, states that the settlement agreement was reached out of mutual concern over the economic impacts of ongoing litigation on the mine, as well as its employees.
He said it is widely acknowledged that the value of the mine has been gradually destroyed since OCM was placed into business rescue in 2018, as it was the victim of theft and looting, whilst under care and maintenance, which damaged vital infrastructure and stripped the mine of its assets.
“Additionally, whilst OCM retains its linked entitlement to export coal via Optimum Coal Terminal’s (OCT) shareholding in Richards Bay Coal Terminal, OCM’s export allocation has been suspended until the finalisation of the forfeiture proceedings and the implementation of the OCM and OCT business rescue plans. This has left the mine with little income,” he says.
“Settlement was the only option to save jobs and protect the future of OCM for the benefit of its creditors, its workers, and the greater Hendrina community who rely on the mine for their livelihoods.”
Bester says Liberty Coal is pleased that the NPA realised the importance of OCM as a strategic asset in terms of its contribution to the economy and its critical role in supporting the livelihood of thousands in Hendrina and surrounding communities.
He says that thanks to the speedy resolution that benefits all parties, the business rescue plans can now be implemented.
At the same time, the court has also dismissed an application brought by Griffin Line General Trading LLC to intervene in the forfeiture application with the aim of postponing the settlement order.
“We can finally draw a firm line beneath OCM’s chapter with both the Guptas and business rescue and begin a new chapter. There’s a difficult road still ahead, but we look forward to restoring the mine and revitalising its role within the community and as an important economic contributor,” he concludes.
Issued by Liberty Coal, 2 February 2024
