06 Apr 2017

All the shareholders of Pula Steel have to date invested P185 million into the business, Assistant Minister of Investment, Trade and Industry, Mr Biggie Butale has said.

Mr Butale was responding to a question in Parliament from Selebi-Phikwe West MP, Mr Dithapelo Keorapetse.

“Shareholders who fail to contribute money to the project, as per any capital raising call at any given point in time, will be diluted as per the shareholders’ agreement,” he said.

In view of the ongoing transition or transaction, Mr Butale said it was the prerogative of any potential BCL buyer to decide how it treated its shares held in Pula Steel.

Through the Citizen Entrepreneurial Development Agency (CEDA), he said the government had successfully petitioned the court as a creditor and “resultantly the court placed Pula Steel under judicial management.” This, the assistant minister said, was to safeguard the interest of CEDA’s stake in Pula Steel.

He said the court also ordered that the judicial manager be authorised to secure and preserve assets of Pula Steel, prevent or restrain the continuing mismanagement of Pula Steel and to ensure that Pula Steel would be able to meet its obligations, so as to avoid winding up thereof.

Additionally, Mr Butale said the court also ordered that the judicial manager be authorised to do all that was necessary to preserve the interests of members and creditors of Pula Steel.

The immediate interest of CEDA, he said, was for Pula Steel to attain production stability under phase 1, hence judicial management.

He said Phase 2 would bring about additional opportunities for Pula Steel and the business community of Selebi-Phikwe, but that it was too early to focus on Phase 2.

Mr Keorapetse had asked the minister to update Parliament on the financial contribution of Pula Steel shareholders, what would happen to shareholders who had failed to contribute money to the project, and what would happen to BCL shares and whether they were part of BCL assets that were up for sale.

He also asked the minister what government was doing to safeguard its majority stake in the company, and to ensure that phase 2 of the project was implemented for the downstream industries to emerge. ENDS