South Africa’s largest development finance institution has thrown its arm around Oakbay Resources and Energy. Oakbay Investment is a company owned by South Africa’s out-of-favour family, the Guptas.
The investment company is also a sister company to ANN7 and The New Age – which are owned by the Indian-South African family.
However, it is not news that all has not been well with the investment company lately. The saga began after shocking revelations emerged from top ANC leaders that the Guptas had been influencing and interfering in government affairs – primarily because of their closeness to President Zuma.
After finding it very difficult to swim past the ‘troubles’ launched on them by most South Africans, the influential family left for India – though, they asserted that they only traveled for a wedding ceremony.
The family’s absence however was greatly felt by the companies they left behind – as not long after their departure, four financial institutions severed ties with Oakbay Investment. At the other end, the family’s television channel, ANN7 got spanked by DSTV.
Apparently, things metamorphose from bad to worse for the companies and it was at this stage that they started seeking for all-round help. Kindly enough, government intervened and appointed three ministers to help woo back people’s support and confidence in the companies.
IDC To Resuscitate Oakbay Investment
Meanwhile, the Industrial Development Corporation says it has provided financial assistance to the company. Announcing this on Tuesday, the institution asserted that its officials met with Atul Gupta and members of his business in preparation for the financial assistance.
IDC CEO Geoffrey Qhena, who confirmed the development said, “It is common knowledge that the IDC has provided financial assistance to Oakbay Investment.
“In the period leading up to the finalisation of negotiations regarding the transaction and in the normal course of business, Mr Ufikile Khumalo (who was at the time the divisional executive responsible for mining and beneficiation) and Mr Abel Malinga (the current divisional executive responsible for mining & metals industries) held several meetings with officials, executives and shareholders of Oakbay Resources & Energy, including Mr Atul Gupta and Mr Jagdish Parekh.”
Qhena however added that “none of these meetings took place at the Guptas’ Saxonwold Estate”.
All meetings with officials, executives and shareholders of Oakbay Resources took place at the offices of the IDC. None of these meetings took place at the Guptas’ Saxonwold Estate.”
Remarkably, he made it clear to all and sundry that “there were no political considerations associated with the restructure (and) the restructuring was done purely on commercial terms as set out below”.
The original R250m loan is expected to be fully repaid, as R137.5m has already been received to date and R112.5m is outstanding as at April 30 2016.
The next instalment of R37.5m is payable by the end of June 2016, with intention of the full capital being repaid by March 31 2018.
The interest of R257m 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.”
On an important note, Qhena stated that the meetings took place in a written reply provided by Economic Development Minister Ebrahim Patel to Democratic Alliance MP Michael Cardo on Tuesday.
The Industrial Development Corporation (IDC) is South Africa’s largest development finance institution that helps build industrial capacity that fuels the country’s economic growth, by funding viable businesses.