The sale of Koornfontein coal mine – one of the Gupta companies now in business rescue – has hit a legal obstacle: losing bidder Lurco Group is asking the High Court to interdict the business rescue practitioners from selling the mine to another bidder, Black Royalty Minerals (BRM).

According to a Moneyweb report, Lurco submitted two bids for the mine, both for R500m.

The initial bid was backed by funding from Central Energy Fund (CEF) subsidiary African Exploration Mining and Finance Corporation (AEMFC). CEF is owned by the state. Lurco also submitted an alternative bid, independent of AEMFC, with funding from Ocean Partners Holdings.

Lurco says the business rescue practitioners (BRPs) unlawfully changed its business rescue plan in October when they demanded that the full purchase price for the Koornfontein assets be placed in a SA bank account within five days.

Lurco was unable to meet this deadline as funds had to be shifted from an overseas account, for which regulatory approval was required. Having missed the deadline, BRM was anointed as the preferred bidder.

The BRM bid, at about R300m, is substantially lower than Lurco’s.

According to Lurco chief operating officer Aubrey Chauke’s affidavit had Lurco been made aware that the full purchase price would have to be placed in a SA bank account within five days, it would have amended its bid accordingly.

Business rescue practitioner Louis Klopper reportedly told Moneyweb the Lurco application will be opposed.

‘As BRPs, we are compelled to follow the instructions of creditors, and these were the conditions we are mandated to execute. Lurco is within its rights to bring this application, but we are concerned that this could delay the recommencement of operations at Koornfontein.’

Full Moneyweb report