Johannesburg, South Africa — MININGREVIEW.COM — 06 July 2010 – Another new controlling Indian shareholder is bailing a South African coal junior “’ South African Coal Mining Holdings (SACMH) “’ out of its financial difficulties, Miningmx reports.
The agency adds that this latest development marks the growing interest of Indian companies in South Africa’s coal sector, viewed as a source of supply for coal to be imported by new power stations being built on India’s west coast
SACMH’s results for the year to end-December published yesterday showed that controlling shareholder JSW Energy was currently negotiating with Standard Bank over a R128 million loan which is in default. JSW Energy bought the 49.8% stake previously held in SACMH by Royal Bafokeng Capital in May, and also made an offer to minorities at 30 cents per share.
JSW is currently in negotiations with Standard Bank to settle SACMH’s outstanding loan. JSW’s proposal is to lend R70 million to SACMH, which will be used to pay down the loan and the balance will then be repaid over a five-year period.
JSW has also committed to provide R25 million to meet short-term capital expenditure requirements at SACMH, as well as R40 million in working capital so that mining operations can restart in the next few months.
Trading in SACMH shares has been suspended since May 2009.
This action by JSW follows the steps taken by Indian group GMR Energy to bail Toronto-listed junior Homeland Energy (Homeland) out of problems over its R149 million debt with Nedbank.
Miningmx reports that Homeland had to make a repayment of R12 million on that facility to Nedbank on 30 June, but was not financially able to do so.
GMR made that payment and “has agreed to provide any additional comfort that is required to ensure that Homeland meets its obligations under the Nedbank facility.”
Homeland owns the operating Kendal mine near Ogies as well as the nearby Eloff project.