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Project Halo wins Gupta's South African mining assets with 3.05B-rand bid

Project Halo, a South African consortium, has submitted the winning bid of 3.05 billion South African rand for three major assets owned by the Gupta family-linked Tegeta Exploration and Resources Pty Ltd., which has been in administration since February, Bloomberg News reported Dec. 12.

The sale includes Optimum Coal Holdings Ltd. for a maximum of 2.8 billion rand, Koornfontein Mines (Pty) Ltd. for 200 million rand, and Optimum Coal Terminal (Pty) Ltd. for 50 million rand, according to the term sheet seen by Bloomberg. The winning bid was confirmed by Bouwer Van Niekerk, a lawyer for the business rescue practitioners.

Project Halo will also provide financing worth 600 million rand over the next six months to keep the Tegeta operations in the Mpumalanga province and Richards Bay Coal Terminal Co. Ltd. running.

Gupta-owned Oakbay Investments Pty Ltd., the parent company of Tegeta Exploration and Resources, is said to be opposed to the deal. The company has also applied to the Pretoria High Court to remove business rescue practitioners Kurt Knoop and Johan-Louis Klopper.

Optimum supplies coal to state-owned Eskom Holdings SOC Ltd., which is at the center of an investigation over allegations that members of the Gupta family used their relationship with former President Jacob Zuma and his son Duduzane to acquire business contracts.

Glencore PLC placed the Optimum coal operations under bankruptcy protection in 2015 after Eskom refused to renegotiate an unprofitable supply contract and meted out penalties. Tegeta Exploration and Resources acquired the mine from Glencore in 2016, but in March, Glencore was reportedly thinking about bidding to buy back Optimum.