Resgen funding

Business / Mining

New Resgen team keen to secure loan for coal mine
BY CHARLOTTE MATHEWS, 04 DECEMBER 2015, 06:07

Picture: THE TIMES

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In this article

• JSE-listed companies: Resource Generation
• Companies and organisations: Public Investment Corporation

THE new management team at coal developer Resource Generation (Resgen) is following up urgently on the €480m loan that previous management announced it had secured from Swiss entity HAB & JPR Privee, says interim CEO Robert Lowe.

The loan would enable Resgen to build its Boikarabelo mine in the Waterberg. Previous management said HAB & JPR Privee had reserved its rights to cancel if Resgen’s directors changed.

This was a last-ditch attempt to fend off a proposal by a group of Resgen’s shareholders including Altius Investment Holdings, the Public Investment Corporation (PIC) and Noble Resources, to change the board because they were dissatisfied with the progress being made on financing the mine over the previous four years.

The attempt failed as four of Resgen’s directors including CEO Paul Jury, were voted out at the annual general meeting late last month, and replaced with six new ones.

The new chairman is Denis Gately, an Australian energy and resource lawyer who sits on the boards of other Australian resources companies. The new board includes greater representation from South Africans than before, such as accountant and entrepreneur Lulamile Xate and former AngloGold Ashanti executive Rob Croll.

Mr Lowe, who is also the CEO of Altius, said on Thursday that the new team had "a clear vision: to complete the debt funding and commence construction in 2016. Details will be communicated to shareholders as soon as possible."

He would be meeting an HAB & JPR Privee representative next week and had made enquiries about the entity, on which there was little public information. He had seen correspondence between Resgen and HAB & JPR Privee thatshowed the previous board was unable to agree terms and the proposal was "effectively dead".

One of the shareholder group’s criticisms in a September statement of Resgen’s previous management was that the debt club formed last year to seek funding solutions that included the likes of HSBC and Rand Merchant Bank, had received "limited interaction and little assistance".

Mr Lowe said he would seek to revive the debt club early next year while pursuing overtures to HAB & JPR Privee.

Asked if the debt club would serve bankers’ interests rather than shareholders’, he said the interests of Noble Group and the PIC, as the two largest shareholders in Resgen, were aligned with those of all shareholders.

"The South African development finance institutions are particularly supportive of the project and want to see the earliest possible closing of the debt funding," he said.