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WSL - Wescoal Holdings Limited - Application to set aside liquidation

Release Date: 04/11/2011 07:05:33      Code(s): WSL
WSL - Wescoal Holdings Limited - Application to set aside liquidation           
WESCOAL HOLDINGS LIMITED                                                        
(Incorporated in the Republic of South Africa)                                  
(Registration number 2005/006913/06)                                            
JSE Share code: WSL   ISIN: ZAE000069639                                        
("Wescoal" or "the Company")                                                    
Shareholders are referred to the announcement dated 31 October 2011 regarding   
the application by BSM Mining (Pty) Ltd ("BSM Mining") for the liquidation of   
Wescoal Mining (Pty) Ltd ("Wescoal Mining"), a wholly owned subsidiary of       
Shareholders are advised that Wescoal and Wescoal Mining have applied to the    
North Gauteng High Court to set aside the application for the winding up of     
Wescoal Mining. The relief was sought on the basis that the winding-up          
application is an abuse of the process of court and that it is part of a        
strategy devised by BSM Mining and its director, Simon Mdau, to embarrass       
Wescoal and extort payment of a debt, which is disputed on bona fide and        
reasonable grounds. The main points in Wescoal`s application are:               
*    The amount claimed is for R 84 146;                                        
*    The debt claimed by BSM Mining is disputed as BSM Mining has claimed VAT on
    the Royalties, which it was not entitled to do, for the following reasons:  
    *    VAT number appearing on BSM Mining`s invoice is not registered with    
SARS and invalid;                                                      
    *    BSM Mining is not registered for VAT with SARS;                        
    *    The royalty determined in terms of the Royalty Agreement is fixed at   
         R2,46 per ton mined and does not allow for an additional 14% to be     
added thereon.                                                         
*    Wescoal Mining is not insolvent and has made a substantial operating profit
    for the six months to 31 August 2011.                                       
The above matter was placed on the urgent Court roll on 3 November 2011.        
Regrettably the judge ruled that application is not urgent and that the matter  
should take its normal course through the Court.                                
Wescoal has evidence that BSM Mining is acting in concert with Sutha Civils who 
have jointly and severally embarked on a program since March 2011 to embarrass  
and harass Wescoal and elicit shareholder concerns. This is evident from the    
fact that the full application for the liquidation of Wescoal Mining (Pty) was  
hand delivered, by an individual who wished to remain anonymous, to a local     
business publication on Friday morning 28 October 2011 after only being lodged  
with the North Gauteng High Court on the preceding Thursday afternoon.  As of   
Thursday 3 November 2011 the Court application on which the article was based,  
had still not been served on Wescoal.                                           
The board of Wescoal recognizes that the events since March 2011 have impacted  
on investor confidence. Planned announcements over the next few weeks together  
with the group results due on 24 November 2011 will go a long way in restoring  
confidence in Wescoal and its shares.                                           
Wescoal will still proceed with the application against BSM Mining through      
normal court channels as Wescoal remains convinced that the allegations brought 
by BSM Mining have no substance at all.                                         
A full set of our court papers will be on our website www.wescoal.com later     
4 November 2011                                                                 
Exchange Sponsors                                                               
Date: 04/11/2011 07:05:33 Supplied by www.sharenet.co.za                     
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