SHAFT Sinkers, the essentially South African mine shaft development company, is poised to rise from near financial ruin, but it is unclear whether shareholders will benefit from the recovery.
It has put its main South African operating subsidiary into business rescue, after £10m in legal fees and a five-month platinum strike last year crippled the company and threatened to drag down the entire London-listed entity, which has valuable projects in India, the Democratic Republic of Congo, Kazakhstan and SA.
It has lost four, big shaft-sinking contracts in the local platinum sector, with Impala Platinum terminating three of those and Royal Bafokeng Platinum the fourth.
With the problematic South African company ring-fenced, Marius Heyns, previously CEO of construction company Basil Read for a decade, plans to resurrect the business by focusing on the mining subsidiary. Mr Heyns is executive chairman and acting CEO and chief operating officer.
A $917m claim by Russia’s EuroChem was directed at the South African division and by ring-fencing it, the rest of the business would be unaffected by the claim if an arbitration process in Zurich went against it, Mr Heyns said. The results of the arbitration hearing are expected “imminently”.
Shaft Sinkers secured $4m in loans from Hillside, a company that has already injected £5m into it, and Standard Bank to underpin its projects in India and the Congo.
Hillside can, at any time, call in its £5m loan plus interest, which more than doubles the market capitalisation of Shaft Sinkers, or it can convert the loan into shares, giving it about 70% of Shaft Sinkers.
The Shaft Sinkers board must decide by the end of April whether to continue its suspended listing in London, where its share price had spiralled down to 0.5p each, valuing the company at £2.3m. Mr Heyns said his recommendation was to delist the company and rebuild it.
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