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Kebble facing Western Areas putsch
David McKay
Posted: Mon, 08 Aug 2005
[miningmx.com] -- BRETT Kebble, CEO of Western Areas, has been asked to relinquish his executive duties if he is to secure refinancing for the beleaguered gold producer.
If he accedes, this will be the second time Kebble has been forced to step down from the position of CEO in the last five years. He resigned in 2000 shortly after revelations that he may have manipulated shares in order to repel the hostile takeover of Randfontein Estates Mining Company by Harmony Gold.
His father, Roger Kebble, resigned from Western Areas on July 27 citing interest in other projects.
Brian Gibson, spokesman for Western Areas, said he was unaware of any plan to oust Brett Kebble. “I’m not aware of any such moves. At the moment Brett Kebble is the CEO of Western Areas and that’s the situation until I’m told otherwise,” he said.
Kebble is also facing pressure from shareholders of
Randgold & Exploration of which he is also CEO.
Bloomberg News reports that Aflease Gold & Uranium Resources (Aflease) and Trinity Holdings may ask management to quit this week. "We require more transparency from a public company, shareholders have had enough," said Neal Froneman, CEO of Aflease.
Froneman told Bloomberg that shareholders wanted significant changes within a week. Quinton George, MD of Trinity Holdings, said investors were acting independently.
David Barritt, a spokesman for Randgold & Exploration, said no formal notice had been provided to the company about the demands from shareholders.
Western Areas unveiled plans for a R800m rights offer earlier this year when the share was trading at about R24/share. Refinancing of some sort is crucial because it will enable Western Areas to meet $12m in outstanding capital for the South Deep project, of which it is a 50% shareholder.
It will also enable it to repay JCI, a sister
company, about R200m in loans and complete an empowerment deal in which Anglo American will part with 15% of Western Areas. JCI could use the money to pay Peter Skeat about R80m Kebble owes him in Aflease shares.
Allan Gray, which owns 25% of Western Areas, and other stakeholders, including Investec Bank, have warned that refinancing can only take place if Brett Kebble takes a minor, probably non-executive, role in the company. Though reluctant, Kebble is considering this proposal. He could not be contacted at the time of publishing, but Miningmx will continue to seek his comments.
Investec is not a shareholder in Western Areas, but it has about R1bn in financial exposure as one of the counter parties on Western Areas’ hedge book, estimated to be R2bn underwater. Since Investec’s hedge loan to Western Areas is secured by shares in the company, it is anxious to preserve it. The other counter party in Western Areas' hedge book is AIG, a US financial services
company.
There are fears Western Areas is bankrupt, partly related to the overrun on South Deep’s budget and commissioning. In addition, JCI has been suspended because it has failed to submit its annual report and financials. JCI operates as treasury to the Brett Kebble investment in Western Areas.
Investec therefore wants to restore the company’s value by installing a more credible CEO to run the firm. A number of high profile individuals have been suggested including Bill Nairn, a former MD of JCI Ltd, and until his recent retirement, an executive director of Anglo American.
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