His comments were contained in a reply to a question to Economic Development Minister Ebrahim Patel by Democratic Alliance economic development spokesman Michael Cardo. DA MPs have asked a series of Cabinet ministers whether they had met any members of the Gupta family within the context of allegations that they had captured the state through their close association with President Jacob Zuma. “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 and metals industries) held several meetings with officials‚ executives and shareholders of Oakbay Resources & Energy including Mr Atul Gupta and Mr Jagdish Parekh.Why banks ditched the GuptasIn the current political environment of media leaks and vendettas, it is perhaps surprising that no one in the media has managed to find out exactly why it was that Barclays Africa decided to close the bank accounts of the Gupta-owned Oakbay Investments. “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 Gupta’s Saxonwold estate‚” Qhena said.In addition‚ Malinga twice met Oakbay Resources chief operating officer Ronica Ragavan last year‚ to finalise the terms for restructuring the company’s existing facilities with the IDC.“The second meeting discussed a possible early redemption of IDC facilities by Oakbay Resources. The meeting to discuss the restructuring of Oakbay Resources facilities took place at the IDC while the discussion on possible early redemption of IDC facilities by Oakbay Resources took place at the client’s offices at 144 Katherine Street‚ Sandton.”In reply to another Cardo question‚ Qhena stressed that there were no political considerations in the IDC’s decision to restructure its financial facility with the Oakbay mining company. Cardo wanted to know why the IDC decided to restructure its interest in Oakbay at a reduced interest rate of prime plus 2%.“The restructuring was done purely on commercial terms‚” Qhena said.He explained that the original R250m IDC loan was expected to be fully repaid‚ with R137.5m having already been received to date and R112.5m outstanding as at April 30 2016. The next instalment of R37.5m was payable by the end of June 2016 and the full capital by end March 2018.The interest of R257m from April 14 2010 to May 31 2014 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 risk profile of the company at the time of our initial investment compared to the risk profile of the company at the time of restructuring differed materially. At the time of the acquisition‚ the mine was under care and maintenance and the company was not generating any revenue (that) needed to be brought back into production.“The turnaround strategy of the company was based on an improvement in operational efficiencies and productivity. The IDC initially viewed the asset as a pure uranium play (the gold potential was not considered at the time due to level of accuracy of the information) compared to the time of restructuring‚ there was a demonstrable open-cast gold reserve with a proven operational record. At the time of the acquisition‚ the ‘perceived’ risks were higher‚ hence the equity type return of 10% real after tax internal rate of return.”Qhena said the IDC’s pricing mechanism always took into account both the level of risk and developmental effect while the repayment profile mirrors the anticipated cash flow generation of the asset/project.“At the time of the restructuring‚ the IDC demanded that the company part settle R100m of the original facility before the restructuring of the facility.“In addition the main shareholder had injected an additional R293m and the company was generating positive cash flows from the gold production concomitant with now a demonstrable operational track record from the gold production. Moreover‚ the IDC facility was reduced by R100m and the balance of the original capital continued to be secured by the assets of the company‚ giving the IDC a security cover of more than one times — hence the prime plus 2% post the restructuring.“It is not the first time that the IDC has done a restructuring of this nature where a debt facility is converted into equity. Ordinarily both the interest and capital are converted into equity. The difference in this instance is that only the interest portion was converted‚ retaining the capital for it to still be repaid‚ thus putting us in a better position‚” Qhena said...