TRADING in Wesizwe Platinum shares was suspended by the Johannesburg Stock Exchange today as the firm’s funding crisis appeared to deepen.
Wesizwe said the suspension of its listing was owing to “an ability of the company to publish its audited annual financial statements” for the year ended December. Wesizwe said it was “working diligently” to publishing the numbers, as well as its annual and sustainability reports and notice of its annual general meeting by July 31.
Signs all was not well at Wesizwe have been apparent for a number of years. In October, auditor SNG Grant Thornton raised questions about whether Wesizwe was a going concern. Before that, the company was embroiled in labour disputes amid restructuring. It also suffered a cyber attack which delayed the publication of its financial statements.
The company has also struggled with its concentrator at its Bakubung platinum mine situated in South Africa’s North West province. The year-long delay seriously hampered the ramp up of the Bakubung mine which is built to produce 420,000 ounces of PGMs a year.
Questions about the firm’s solvency are related to huge debt levels which mean its future is dependent on major shareholder China African Jinchuan – which holds 45% of the company – providing more finance, Miningmx reported in April.
According to the auditors, Wesizwe’s directors have not been able to provide them with agreements from the shareholder committing funding for the foreseeable future.
The response from Wesizwe’s directors has been that Jinchuan is committed to the company’s future and has always provided the necessary funding in the past. They have no reason to believe it will not do so in future and therefore they believe they are justified in publishing the accounts on a “going concern” basis.
However, Wesizwe has run up debts beyond the current funding cap of $1.5bn agreed with Jinchuan and the Chinese group is taking its time over approving an increase in that level of funding.
According to a statement from Wesizwe in April approval for the increased funding has to come from the China National Development and Reform Committee and that approval process is “on-going”.
