Union Capital Partners writes down R113m in mining assets
The company says it is unsure about its survival should shareholders reject Afrimat’s plans to acquire Union Capital’s remaining shares
Union Capital Partners (UCP) said on Friday that it had impaired more than R113m in mining assets in the year to end-June.
Its Nkomati anthracite mine was temporarily closed following a fall of ground event in the underground mine in October 2019. In the same month, the mine’s opencast contract miner, Liviero Mining, had been put into liquidation. The mine was also affected by the national lockdown under level 5 and a three-month-long illegal strike.
“Further capital will be required to reopen the underground mine, estimated at R65m, and to establish the new planned opencast box cut at a cost of approximately R60m. These initiatives are currently in planning stage,” UCP said in statement.
The company made a loss from operations of R48m during the period.
UCP reported a headline loss per share of 2.92c from a loss of 3.30c in the comparable period. Revenue fell by 4.3% to R958.3m and no dividend was declared for the period.
The company also said it was unsure about its survival should shareholders reject mining group Afrimat’s plans to acquire the company’s remaining shares.
In May, bulk commodities and construction material company Afrimat said it would make an offer to acquire UCP’s shares. Afrimat holds 27.27% of the shares and the offer is being put to shareholders on October 9.
“If the Afrimat transaction is not implemented, a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern. Our conclusion is not modified in respect of this matter,” the company said.
The acquisition of the shares will be by way of a scheme.
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