Aurora Empowerment Systems was on Friday given five more months to find financial backing to buy Pamodzi gold mines on the East Rand, but might itself face liquidation proceedings.
Judge Aubrey Ledwaba extended provisional liquidation orders, granted in the high court in Pretoria in 2009 against companies in the Pamodzi group, until August 16 this year.
This was to allow the provisional liquidators and preferred bidder Aurora, which took over the running of the companies, time to conclude possible agreements for financial backing with Chinese company Shang Dong Gold Ltd and Swiss based investment firm, GEM.
Trade union Solidarity, however, said the union and about 58 individual workers had served notice on Aurora that they would apply for the company’s liquidation unless outstanding union fees and salaries of over R4,6-million was paid.
Solidarity legal advisor Hanno Bucksteg said Aurora was given until Thursday next week to react, failing which papers would be drawn up to start a process to have the company liquidated.
A group of upset mineworkers, faced with an uncertain future and no assurance as to when they would receive their outstanding salaries, protested outside the high court with placards complaining that their children were going hungry.
One of the provisional liquidators, Enver Motala, said in an affidavit it would be in the best interests of all creditors and the continued employment of workers if a buyer for all of Pamodzi’s assets, including their mining licenses, could be found.
Sale of assets
He said the sale of assets in a piecemeal fashion could result in concurrent creditors receiving zero cents in the rand and the major secured creditor, the Industrial Development Corporation, receiving far less than the full value of its claim.
“There would be no prospect of further employment on the mines, which will have a significant detrimental economic and social effect in the area,” he said.
“We will gladly consider any meaningful offer received from any bidder. We have, on countless occasions, called on the major trade unions to suggest viable solutions, backed up with guarantees, to save the mines, but to no avail.
“The trade unions agreed to Aurora being the preferred bidder,” he said.
Motala said a listed Chinese company Shang Dong Gold had disclosed that it would make $100 000 000 available to Aurora to enable it to consummate the transaction, but was awaiting proof of funds from its Chinese Bank, which could take a considerable period.
“We appreciate that the return date [for the liquidations] has been extended on several occasions in the hope that the transactions could be consummated, however, we are mindful of the fact that to date no transaction has been finally consummated notwithstanding our continued efforts to reach that goal.
“In the absence of funding being promptly advanced [whether by Aurora or any other alternative bidder for that matter], we will have no alternative but to seek a final winding up order against the respondents.
“We do not have the funds to place the mines on car and maintenance and to ensure that we continue to act in the best interest of the general body of creditors.
“If a purchaser for the assets of the respondent [which will include the mining license] cannot be found, it is very likely that environmental disaster will ensue at the respective mines.
“It is so that there are significant pumping obligations to extract water overflow from the mines, which Aurora undertook to comply with,” he added.
He pointed out that Aurora have been in discussions with the Mineral Resources and Water Affairs departments, both of whom have expressed broad agreement with the management strategy adulated on both sides. — Sapa