CAPITAL LIMITED Templar
Optimum was placed into business rescue in
Despite the best efforts from all parties involved, various sales processes have come to naught, as the various bidders have failed to provide adequate verification of their funding capabilities.
Templar, in conjunction with the business rescue practitioners and other significant creditors of Optimum, has proposed a business rescue plan that is expected to be presented shortly to Optimum's creditors. It proposes that Templar will convert its creditor claims against Optimum in the amount of approximately R1.3bn into equity.
In addition, the debt to equity conversion proposes that certain qualifying pre- and post-commencement creditors of Optimum will have the option to be settled on an agreed cents-in-the Rand basis, payable either in cash, alternatively by converting their claims into non-voting ordinary shares.
The total equivalent value of Templar's debt to equity proposal is approximately R3.2bn, excluding the capital required to bring the mine back into production.
Templar has offered to settle Eskom's creditor claim in coal to be supplied in accordance with a separate Coal Supply Agreement which is envisaged to generate a return for Eskom in the amount of R1bn.
Templar and Optimum's business rescue practitioners have consulted with numerous other creditors in preparation of the plan, including the NUM, UASA and Eskom.
Once the plan has been approved by the requisite majority of Optimum's creditors, Templar will implement the debt to equity proposal, conduct the relevant feasibility studies and seek the required regulatory approvals which will ultimately result in Templar investing the capital required to bring the mine back into production to the benefit of Optimum's historic creditors, union and non-union employees, the local community and the economy.
Optimum's business rescue practitioners, together with Templar and the NUM are also currently defending a liquidation application brought by
Commenting on the debt to equity conversion,
"Optimum has previously provided employment for over 500 people, and has contributed significantly to the local community and the South African fiscus. Templar believes it is possible for the Optimum mine to get back to where it once was with enough capital investment, the backing of the requisite majority of Optimum's creditors and the support of the local community. To demonstrate Templar's commitment, Templar is converting its debt into equity, essentially taking a de facto equity risk of approximately R1.3bn. In addition, Templar will invest R300m-R500m+ to bring the mine back into production during a phased ramp up period, once the necessary feasibility studies have been completed and regulatory approvals obtained."
Templar intends to work with Optimum's historic suppliers to bring the mine back into sustainable production so as to stimulate the local economy. It also intends to establish an employee share scheme and a community share scheme for the benefit of employees in the local community so as to enable all essential stakeholders to have a vested and rewarding interest in ensuring the success of the mine in future.
Commenting on the debt to equity conversion, the business rescue practitioners said that they hope that all affected persons will make a considered decision when voting on the revised plan by carefully weighing up what is proposed therein with what they stand to receive in a liquidation.
Commenting on the debt to equity conversion, Richard Mguzulu, NUM Representative, said:
"As NUM we are very excited with the latest development and that Templar is willing to come to the rescue of our members and the employees of by restarting Optimum. The mine hasn't been functioning for over two years and that is not good for employees who rely on this mine for survival. It is also not good for the surrounding community of Hendrina, Mpumalanga and for the economy of the country.
We hope that the frivolous litigation which delayed the process of restarting Optimum is a closed chapter and that everyone will spend his/her energy in making sure that Optimum is back in operation. It is our hope after the 151 that government does what it needs to fast-track the process to get mining operations going as soon as possible."
Notes to editors:
TEMPLAR IS AN INTERNATIONAL INVESTMENT FIRM WITH A GLOBAL REACH AND A UNIQUE PHILOSOPHY. OUR INVESTMENTS TEAM OPERATES ACROSS MULTIPLE REGIONS, INDUSTRIES AND ASSET CLASSES: INCLUDING PRIVATE EQUITY, REAL ESTATE, ENERGY & NATURAL RESOURCES, CORPORATE DEBT AND INVESTMENT FUNDS.
Our investment strategy is simple. We follow a differentiated, patient and disciplined approach, which is tried and trusted to generate attractive returns. Through the experience and expertise of our team, Templar has developed a reputation for delivering service excellence, by always aligning our interests with those of investors, partners and stakeholders. We also support portfolio companies and clients with tailored capital markets' advice, developing and implementing both traditional and non-traditional investment and financing solutions.
For further information, please contact:Templar Capital Ltdinfo@templar-capital.com +44 (0)203-949-5587
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