[miningmx.com] – WESCOAL Holdings was “a fundamentally sound company”, said departing CEO, Andre Boje who surprisingly quit the company on March 31 after 18 years amid a dispute that divided the board.
“I don’t have much to comment on at the moment, but I would like to say that Wescoal is in good shape; it’s a fundamentally sound company and I intend to remain invested in the business,” he said in an interview. Boje owns about 5% of the firm.
Shares in the company were 3% weaker on March 31 but had recovered slightly in early trade in Johannesburg gaining about 0.51%.
The junior coal producer and trading firm has been wracked by an internal dispute between Boje and the firm’s chairman Robinson Ramaite. Ramaite is thought to have opposed a takeover of the company by an offshore company in favour of building his own stake in the business in terms of a previously sanctioned transaction.
According to a company source, Wescoal’s board was split with executive directors in support of Boje whilst non-executive directors were behind Ramaite. “It was just head-butting in the end and very personal,” the source said.
The disagreement between management has concerned minority shareholders who are currently being led by ClucasGrey asset manager, Brendon Hubbard who wants two non-executive directors appointed to the board to protect the interests of minority shareholders.
“We have requisitioned an extraordinary general meeting through our lawyers and the company has returned with questions of its own. The matter is also lodged with the JSE so we expect it to happen,” said Hubbard.
According to Hubbard, Ramaite was building his stake in Wescoal as required in order to fulfil Eskom’s black economic empowerment regulations before qualifying as a supplier. However, the shares were being bought at very cheap levels.
At the same time, an offer came in from an international company which was also at low levels compared to internal valuations. “We looked at the values and we just want to see minority shareholders get a fair shake,” said Hubbard.
Hubbard believed that minority shareholders equal to 40% of the share – enough to block motions raised by management – would support the idea of installing two new directors on to the board.
