Africa-Press – South-Africa. Investors in junior coal miner Salungano Group were hit with a triple whammy of bad news on Monday when the JSE suspended its shares, while the Eskom supplier also announced its biggest subsidiary would be facing both business rescue and liquidation proceedings on Tuesday.
The suspension of trading in the company’s stock follows its failure to publish results for its 2023 year by the end of June, which was extended to the end of July and then to August. In a separate announcement in the afternoon, Salungano announced it “has learnt” that a contractor had filed a court application for the liquidation of its major subsidiary Wescoal Mining.
While Salungano said it had filed its own papers to oppose the liquidation bid by IPP Mining and Minerals Handling, it also announced it had instead applied to place the mining unit in business rescue.
Both the liquidation and business rescue applications will be heard at the North Gauteng High Court in Pretoria on Tuesday, Salungano’s company secretary Yolande Lemmer told News24.
Wescoal Mining houses Salungano’s coal mining assets in the Khanyisa Colliery near Ogies and Elandspruit Colliery in Middelburg. Salungano also owns half of the Arnot Colliery, which is also in business rescue, as well as Moabsvelden and Vaggatfontein mines. All the operations are in Mpumalanga.
Through the mines, Salungano is one of the smaller suppliers of coal to Eskom.
In a shocking development in June, the entire audit, risk and compliance committee of Salungano’s board, which has the authority and responsibility to consider and approve the audited financial results, resigned and left the company unable to finalise the audit process.
No reasons were offered for the resignation of the independent non-executive directors Nonzukiso Zukie Siyotula, Nomavuso Mnxasana and Andile Mabizela.
Nobody has yet been appointed to replace the departed directors, meaning the company remains without an audit committee and is therefore likely to miss its self-imposed end-of-August deadline to publish the results.
These developments have combined to wipe off 54% off the value of Salungano since the beginning of the year, to the current R210 million market capitalisation.
According to News24’s calculation, chief executive officer Robinson Ramaite owns about 71% of the company’s stock.
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