Fin24
"On Tuesday the SA banking industry drew a line in the sand for black economic empowerment (BEE) in the mining industry because BEE has been financed with debt that the banks could no longer support.
The government will have to buy out these mining companies or the mines will need to sell their production forward to repay their BEE loans"
... he didn't want to use the term "toxic assets", but others "are welcome to do so".
These deals have involved enormous amounts. It was unwise to do these deals at fair value when the resource supercycle was at its height, he continued ...
Moreover, these transactions frequently involve a division between shareholding with voting rights and economic shareholding. "In reality the banks that advanced the loans now control these assets,"
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Oh my. He who pays the piper calls the tune. The bankers hold the rights, NOT the BEE partners. Capitalism - gotta love it. THe government WILL respond, they have to, but most likely with the usual amount of idiocy, bluff, denial and threats.
This is news to watch out for though.
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HKGK
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