Lily and Barbrook Mines saga deepens with new creditor
The mines were placed under business rescue after Lily Mine collapsed in February 2016.
Two bidders are standing in line to acquire the Barbrook and Lily gold mines, but legal issues are holding things up. Picture: Vantage Goldfields
Arqomanzi, which was created by the amalgamation of SSC and Taung Gold, brought an application in the Mpumalanga Division of the High Court on Monday, reports Lowvelder.
They sought to declare that Standard Bank had validly ceded all the loan claims of Vantage Gold SA (VGSA) to Arqomanzi, to the amount of R389 million.
The Gauteng Local Division of the High Court held on September 25 that the business rescue practitioners (BRP), namely Robert Charles Devereux and Daniel Terblanche, are prohibited from implementing the debt rescue plan adopted by the creditors of VGO, Barbrook Mine and Makonjwaan Imperial Mining Company (MIMCO).
The Lily and Barbrook mines were placed under business rescue after Lily Mine collapsed in February 2016. Mining operations ceased and MIMCO, a subsidiary of Vantage Goldfields, was unable to pay its debts.
A few months ago, SCC and its subsidiary Flaming Silver (FS) attempted to enforce a sales of shares agreement entered into between FS and VGSA on November 1 2017, in an appeal application to the full bench of the Mpumalanga Division of the High Court. VGO endeavoured to complete the sale of a 100% stake in its wholly owned subsidiary VGSA to Real Win Investments (RWI), before more litigation ensued. The appeal was dismissed with costs.
VGSA is also facing pending litigation in the Supreme Court of Appeal (SCA).
FS petitioned the court on the basis that Acting Judge Hendrik Roelofse erred in this judgement.
On Monday, Roelofse ruled that SBSA legally ceded all of VGSA loan debt to Arqomanzi and ordered that the former be an independent creditor of VGO.
The BRPs are to consult with VGO, Barbrook Mines Proprietary Limited and MIMCO, as well as the affected stakeholders to propose amendments to the companies’ business rescue plans within two weeks.
They are to publish the amendments within 10 days thereafter. A vote will be conducted on the proposed amendments at a creditors’ meeting.
VGSA was ordered to pay Arqomanzi’s costs, which includes the costs of the affected persons of VGO and Barbrook Mine, together with the fees associated with the employment of two counsels.
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