Kalagadi Manganese has welcomed a court ruling that an application to place it under business rescue was not urgent, saying the judgement allows all parties to continue discussions on the restructuring of the mining company’s facilities.
The Johannesburg High Court has struck the Industrial Development Corporation of South Africa’s (IDC) application off the roll, saying it was not urgent and advised the parties to approach the commercial court for a special hearing.
“We welcome the court decision on the matter. Kalagadi believes that the IDC’s attempt to place the company under business rescue is thoroughly and comprehensively misguided,” said Daphne Mashile-Nkosi, Founder and Executive Chairperson of Kalagadi Manganese.
Mashile-Nkosi said because of the negative impact on operations caused by the poor performance of its mining contractor, the company had initiated means to restructure its facilities with lenders, amongst others being, African Development Bank and the IDC.
“Since July 2019 we have communicated to the lenders that the company’s facilities may need restructuring. We submitted a formal proposal in December 2019 in this regard, and as recently as 13 March 2020, we submitted additional information as requested by the lenders.
Negotiations were progressing until, without any warning and instead of responding to our application, the IDC took us to court on frivolous claims based on inaccurate information,” say Mashile-Nkosi.
She said the mining company is not insolvent, its employees and creditors continue to be paid and its financial position has stabilised.
“We do not believe it helps to engage our shareholder and lender through the courts. This matter can be resolved through the negotiations we had already begun and the ill- treatment and false media allegations by the IDC are not only unnecessary, but also border on bad faith.
“Kalagadi’s business case is sound and is in fact currently outperforming projections. We have shown this to our lenders and trust the approval for the restructuring can now be fast tracked.
“There is little risk or downside for the lenders given that their respective investments continue to incur interest and, in particular, Kalagadi is not seeking any cash injections.
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“It only seeks a short deferment. Moreover, the assets of Kalagadi far exceed the amounts loaned by the lenders. However, while we remain committed to the negotiations with our lenders, we will unequivocally oppose the IDC should it persist with this mischievous and unwarranted court application” said Mashile-Nkosi.