Johannesburg, South Africa — MININGREVIEW.COM — 14 November 2011 – Gold producer DRDGold says that business rescue proceedings at its 74% held subsidiary Blyvooruitzicht Gold Mining Company (Blyvoor) have been terminated, opening the way for Village Main Reef to formalise its offer for DRDGold’s stake.
DRDGold revealed late last week that it had received an expression of interest from \village.
The proposed R150 million deal would see DRDGold swap its stake in Blyvoor for shares in Village. A formal offer is yet to be received from Village, which was said to be one of four parties interested in Blyvoor.
The expression of interest contained certain conditions precedent in respect of the transaction, including the requirement that the business rescue proceedings be terminated.
Blyvoor’s board of directors started business rescue proceedings in June this year after DRDGold had suspended financial assistance to the subsidiary. The business rescue process provided for in the new companies act replaces the judicial management process in the previous companies act.
At the time, DRDGold CEO Niel Pretorius said that the business rescue proceedings would not interfere with the company’s intention to dispose in whole or in part of its 74% interest in Blyvoor.
DRDGold said the business rescue practitioner appointed to oversee Blyvoor during the proceedings had concluded that there were no longer reasonable grounds to believe that Blyvoor was financially distressed, as envisaged in the Act.
Accordingly, the business rescue practitioner filed a notice of termination of business rescue proceedings with the Companies and Intellectual Property Commission, thereby immediately terminating the proceedings.
DRDGold said it had informed Village of the termination and, although Village still had to confirm whether the termination satisfied the relevant condition precedent to Blyvoor transaction, the move represented an important step towards its potential implementation.