Johannesburg: Glencore Plc’s Optimum Coal unit, which went into business rescue in August citing an unprofitable deal to supply South Africa’s power utility with the fuel, may be sold with at least one offer being considered, according to three people familiar with the situation.
“The business-rescue practitioners are considering all options that are acceptable to Eskom and all stakeholders,” Piers Marsden, one of the people overseeing the process, said by phone. Business rescue is the equivalent of bankruptcy protection. Eskom Holdings SOC Ltd. said in June it wouldn’t renegotiate a contract to supply 5.5 million metric tons of coal annually despite Glencore saying that it was at prices that have been “significantly less than the cost of production for a number of years.” Prices for the fuel in South Africa have declined 43 per cent since the start of 2014 to $47 a ton.
Whoever buys the assets will have to continue supplying Eskom, Khulu Phasiwe, the utility’s spokesman, said by phone.
