[miningmx.com] – THE acrimonious departure of former Resource Generation (Resgen) MD, Paul Jury, and his board in November continues to rumble on with the coal development firm’s current board taking legal advice on A$2.3m in termination benefits paid to two executive directors.
A meeting with Jury and his fellow directors was requisitioned by shareholders, including South Africa’s Public Investment Corporation (PIC), but he resigned on November 25, the day before the meeting was scheduled to take place.
On the same day, the retrenchment of the company’s Sydney staff was approved as well as the payment of termination benefits “in their expectation that their position as directors would be terminated,” said Resgen in its December quarter update published on January 27.
“Termination benefits totalling $2,303,504 were paid to the former board members, executives and staff on the same day. The new board is seeking legal advice in relation to the payment of the termination benefits,” Resgen said.
Jury and Stephen Matthews, were the only two executive directors of Resgen as per the firm’s 2015 annual report. Matthews, who was also company secretary, was paid A$808,984, of which 33% was in shares, in Resgen’s 2015 financial year. Jury was paid A$1.25m of which 43% was through shares.
Martin Debelle, spokesman for Resgen, declined to provide more information until the results of the firm’s legal inquiries were known. However, it’s understood that there is a lack of paperwork related to the termination benefits.
Resgen is building the six million tonne/year Boikarabelo thermal coal mine in South Africa’s Limpopo province and is seeking $400m to complete the project. It was funding of the mine that ultimately led to Jury’s ouster.
Prior to his resignation, Jury argued that he had an undertaking from a Swiss-based private equity company, HAB & JPR Privee, to put $539m into the project.
However, interim Resgen CEO, Rob Lowe, told Miningmx there was not much clarity in respect of the principals behind the Swiss company as it appeared Jury had been operating through a third party.
In the meantime, Lowe is seeking additional sources of funds in Asia and South Africa which may include a debt club option through HSBC and Rand Merchant Bank that has been in negotiation since last year, at least.
The board is also examining how changes to the mine design, siteworks, contracting and operation at Boikarabelo might affect the speed to production and capital requirements before advancing with final funding.
Said Lowe in December: “One of the strategies that we are interested in pursuing is the supply of middlings coal from Boikarabelo to a 245MW independent power producer. We are very anxious to fast-track that”.
Lowe is the CEO of Altius Investment Holdings which is a major shareholder in Resgen and was a party with the PIC, as well as Noble Group, in having the board changed. The Resgen board now has a strong South African flavour.
