DRDGold’s Blyvoor out of financial distress

[miningmx.com] — MID-TIER gold producer DRDGold on Friday said business rescue proceedings at its 74% held subsidiary Blyvooruitzicht Gold Mining Company (Blyvoor) had been terminated, opening the way for Village Main Reef to formalise its offer for DRDGold’s stake.

DRDGold this week said it had received an expression of interest from the exploration holding company.

The proposed R150m deal would see DRDGold swap its stake in Blyvoor for shares in Village.

A formal offer is yet to be received from Village, which was said to be one of four parties interested in Blyvoor.

The expression of interest contained certain conditions precedent in respect of the transaction, including among other things the requirement that the business rescue proceedings be terminated.

Blyvoor’s board of directors started business rescue proceedings in June this year after DRDGold suspended financial assistance to the subsidiary.

The business rescue process provided for in the new companies act replaces the judicial management process in the previous companies act.

At the time, DRDGold CEO, Niel Pretorius, said that the business rescue proceedings would not interfere with the company’s intention to dispose in whole or in part of its 74% interest in Blyvoor.

DRDGold said the business rescue practitioner appointed to oversee Blyvoor during the proceedings had concluded that “there are no longer reasonable grounds to believe that Blyvoor is financially distressed” as envisaged in the Act.

Accordingly, the business rescue practitioner filed a notice of termination of business rescue proceedings with the Companies and Intellectual Property Commission on Thursday -thereby immediately terminating the proceedings.

DRDGold said it has informed Village of the termination and, although Village still had to confirm whether the termination satisfied the relevant condition precedent to Blyvoor Transaction, the move represented “an important step towards the potential implementation of the Blyvoor Transaction”.