Gupta-owned Oakbay set to make huge loss despite improvement

The Guptas’ Oakbay Resources and Energy expects to make a loss of R16.91 million in 2016, which it said is a 56% improvement from 2015’s loss of R38.94 million.
The official results, published on Friday, revealed a headline loss per share for the year ended February 29 2016 of 0.68 cents, up 96.38% from last year’s loss per share of 18.78c, the company said in a statement.
This is important news for the state-owned Industrial Development Corporation (IDC), which has granted loans to the company in which it holds a 3.57% stake.
“The company’s overall financial performance for the year improved compared to the prior year, primarily as a result of margins realised from contract mining activities and a higher rand and gold price, which had a positive effect on operating profits,” the company said in a statement.
The results come after the IDC was advised to ditch the company.
They should “follow the lead of the commercial banks and give the president’s pals (the Guptas) a wide berth in future”, the Democratic Alliance (DA) said.
This followed after banks, auditors and JSE sponsors blacklisted the firm in 2016.
In Parliamentary questions, DA MP Michael Cardo asked what political and commercial considerations led the IDC to strike a restructuring deal with Oakbay at a reduced interest rate of prime plus 2%, given that the specified company defaulted on its first R250m loan to the IDC.
Qhena said,”there were no policial considerations associated with the restructure, (and) the restructuring was done purely on commercial terms as set out below”.
“The original R250 million loan is expected to be fully repaid, as R137.5 million has already been received to date and R112.5 million is outstanding as at April 30 2016.
“The next instalment of R37.5 million is payable by the end of June 2016, with intention of the full capital being repaid by March 31 2018.
“The interest of R257 million being from April 14 2010 to May 31 2014 (the date on which the amount converted was determined) was converted into shares when the entity was listed (at a 10% discount to the listing price).
“The additional interest (after conversion) of prime plus 2% will be repaid as a lump sum on March 31 2018.”
The Guptas resigned from all business positiions this year, including Oakbay Energy and Resources, after they pulled out of their high-profile positions as a result of political and business pressure.
Ajay and Atul Gupta were the co-chairs of Oakbay Investments, while Atul was the chair of Oakbay Resources and Energy.
Varun Gupta was the CEO of Oakbay Resources and Energy, while Duduzane Zuma (President Jacob Zuma’s son) was a director of Shiva Uranium.
He also resigned.
The family has come under increasing pressure due to allegations that they influenced Zuma’s appointment of Mines Minister Mosebenzi Zwane and former finance minister Des van Rooyen, as well as offering ministerial posts to Deputy Finance Minister Mcebisi Jonas and former ANC MP Vytjie Mentor.
“By stepping down from all executive and non-executive positions and any involvement in the business, we hope to save the livelihoods of tens of thousands of people in our great rainbow nation,” the Guptas said.

NEWS24