JSE-listed investment company Unicorn Capital Partners (UCP) has advised that its subsidiary, Nkomati Anthracite, has entered into business rescue.
Daniel Terblanche has been appointed as the business rescue practitioner.
This follows after the High Court granted an application brought about by fellow-listed building material and openpit mining company Afrimat to place Nkomati under supervision and start business rescue proceedings.
UCP, in which Afrimat holds a 27.2% stake, indirectly holds 60% of the issued shares of Nkomati, which operates an anthracite coal mine in Mpumalanga.
As a creditor, Afrimat was in a position to ask for the company to be placed into business rescue, seeing that Nkomati has not been able to settle certain loans and experienced difficulty as a result of the lockdown-imposed shutdown earlier in the year.
Afrimat previously said it believes this step was necessary to protect the interests of Nkomati’s employees, the local communities and creditors, and that the legal steps taken make it possible to securely inject post-startup financing into the mine and prevent the liquidation of the mine.
Afrimat earlier in October stated that it was prepared to inject additional funds into Nkomati once the business rescue process was in place, with such finance enjoying preference, as to repayment, and then acquiring the remaining shares it does not already own from UCP.
Nkomati can add to the diversity of Afrimat’s bulk commodity portfolio, it stated.