JOHANNESBURG (miningweekly.com) - The lifting of the cautionary over fraud-hit JSE-listed coal-mining contractor Sentula had no benefit for the share price, which plummeted to a 12-year low, as the company announced an end to its forensic audit and a shift in emphasis towards recovering misappropriated equipment.
The company advised that the forensic investigation, which centred on an undisclosed bank account in Scharrighuisen Open Cast Mining, had been "largely concluded", accompanied by the share price at one stage falling 11% to R180.
It said that the forensic investigation had "fully" reconciled to cash receipts all hire-purchase agreements entered into in the 2007 and 2008 financial years.
All receipts into and payments from the undisclosed account had been identified and the emphasis of the investigation had now shifted to the recovery of misappropriated assets as opposed to ascertaining whether the company was exposed to losses greater than the R242-million provided for in the 2008 results.
The company reiterated that no further losses were anticipated and confirmed that the forensic evidence supported the conclusion that the party responsible for depositing a mystery R24-million into the undisclosed account was also the recipient of funds from the undisclosed account and, accordingly did not represent a further company loss.
Sentula CFO Deon Louw told Mining Weekly Online that the sharp share price drop was the result of a rumour that the company was about to have a rights issue to raise more funding, which was incorrect.
Louw said, however, that Sentula was cash-generative and fully funded.
"We have a very strong cash flow and have settled debt of R755-million in the last 12 month period ending January 31, 2009, which includes interest in round figures of about R238-million and principal debt of R517-million.
"The businesses generate a lot of cash flow and we can settle our debt of R1,7-billion in its entirety within three years," Louw said.
There had been no board endorsement of a rights issue or a process of that nature.
However, the company was constantly looking at opportunities and how to fund them, but those remained opportunities.
The Sentula group derives its income from contract opencast mining, rehabilitation, earthworks, exploration drilling, crane hire, mining services and the mining of coal from its own investments in a number of coal mines.
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