SA’s Burgh Group picked to keep Gupta coal mines going

SA’s Burgh Group picked to keep Gupta coal mines going

June 26, 2018

This article was originally featured on:moneyweb.co.za

South Africa’s Burgh Group Holdings won a temporary contract to keep mines linked to the Gupta family afloat, according to a business-rescue manager for the assets.

Other parties offered financing, but Burgh “came without conditions,” Louis Klopper, a bankruptcy-proceedings manager at Coronado Consulting Group, said Wednesday. Burgh is “an ideal partner” to provide technical expertise and banking facilities, he said, without disclosing financial terms.

Various Gupta businesses are struggling as banks shun them following allegations the family used ties to South Africa’s former President Jacob Zuma to win contracts. Optimum Coal and six other companies were placed in administration in February and were unable to operate because India’s Bank of Baroda, the last lender in South Africa to have open accounts linked to the Guptas, was preparing to leave the country.

In 2016, Burgh, led by coal entrepreneur Quinton van der Burgh, was involved in an attempt to buy Optimum’s coal-mine export allocation — a stake in the Richards Bay Coal Terminal — from the Guptas, but the deal was abandoned last July.

Breaching code

In November 2016, South Africa’s anti-graft ombudsman published a report saying Zuma may have breached the government’s code of ethics in his relationship with the Gupta family. The former president and the Guptas deny any wrongdoing.

The present agreement with Burgh is for a maximum of 12 months and has no connection to any acquisition, Klopper said by phone. “The sale of these assets to this group is not on the table, it is not in negotiation,” he said.

Glencore is considering a bid for the Optimum mine, two people familiar with the matter said last month. South African miners Exxaro Resources and Seriti Resources Holdings have also said they would consider buying some of the Gupta coal assets.

Klopper said the bankruptcy managers are obligated to publish a business-rescue plan by April 23.

View original article