[miningmx.com] – THE directors of Resource Generation (Resgen) have agreed to hold a meeting requisitioned by a 10.7% shareholder, Shinto Morii, which will propose that the board be replaced including CEO, Paul Jury.
This follows an earlier attempt on September 8 by Noble Group, the Singaporean trading house, to appoint additional directors to boards of Resgen and its BEE subsidiary Ledjadja Coal.
Miningmx reported earlier that Noble is an anchor shareholder in Resgen and has already provided major financial support to the company. It is also part of a consortium with which Resgen is negotiating to raise $400m required to complete construction of the Boikarabelo thermal coal mine in South Africa’s Limpopo province.
It’s regarding the financing that Noble Group and now Shinto Morii – a subsidiary of the black-owned Altius Investment Group – appears to be unhappy.
Sourcing the $400m has been underway since last year with Resgen regularly publishing cautionary announcements that its negotiations with a club of banks was ongoing – without providing much detail. Noble Group is a member of the club with which Resgen is negotiating along with the Industrial Development Corporation and HSBC among others.
Its last communication regarding progress on the financing, contained in its 2015 annual report published on September 15 and tellingly titled – ‘Right Place, It’s A Matter Of Time’ – Resgen said that the club of banks had asked it to reconsider that Boikarabelo be mined on a contractor basis – a proposal Resgen had earlier rejected.
Resgen said it had been in the progress of sourcing quotes from contractors.
In this latest turn of events, Resgen announced to the Johannesburg Stock Exchange that Shinto Torii had successfully requisitioned a general meeting, to be held after November 4, to hear the request for the board overhaul. It is unclear how much support this motion will have among Resgen’s other shareholders.
Resgen said Shinto had requested “… resolutions that remove all four of the existing
directors and appoint the following directors: Lulamile Xate, Konji Sebati, Robert Croll,
Leepeestswe Molotsane, Denis Gately and Colin Gilligan”. It had yet to receive consents from the nominated individuals, Resgen said.
“The company is aware of its obligations under the Corporations Act and will arrange for the meeting to be held in due course,” it added. “The company also intends to defer the Annual General Meeting scheduled for 4 November 2015 to a later date in November so both meetings can be held on the same day,” it said.
One of the directors nominated by Shinto Morii, Xate, is also a non-executive director of Altius Investment Group as well as running his own venture, Kaya Gas. He has experience in renewable energy and timber and holds a non-executive role on Cadiz Asset Management.
In its rationale for reconstituting the board, Noble said the ability of the Resgen to deal with these [financing] issues “… will be greatly enhanced by the appointment of additional directors and that, because of the urgency of these issues, these appointments should be made immediately.”
The Resgen board, however, rejected Noble’s request because: “Noble has not explained how the appointment of additional directors would be in the interests of all shareholders”, and that “… the board considers it has the required expertise with its consultants to address the issues currently being faced.”
Resgen also said Noble was part of the ‘club of financiers’ commenting that “… terms and conditions put forward by the club have not been acceptable to the company due to the excessive returns sought by some club members including Noble”.
