Nearly 50 Gujarat NRE Coking Coal workers will walk out of the Illawarra mines for the last time today, leaving behind their jobs after a turbulent year.
Chairman Jasbir Singh announced 47 people had been offered a voluntary redundancy package, after the company announced it needed to restructure the workforce at Russell Vale and Wongawilli mines late last year.
The company originally planned to shed about 90 jobs, or 20 per cent of its workforce, due to high production costs, unstable global markets and delayed expansion approvals.
‘‘Over the last three to four months considerable effort has been directed to ensuring the mines remain operational and as many jobs as possible are maintained,’’ Mr Singh said. said.
“While the primary aim of the voluntary redundancy scheme was to reduce manning by up to 90 positions, we will offer this to 47 workers who will finish their employment this week.’’
‘‘We will then look at the potential for workers to relocate between the two mines, taking into account the vacancies that have occurred in the last four months due to resignations and natural attrition.’’
It is believed the company will also pursue forced redundancies in the coming weeks.
Mr Singh said production, including longwall mining and development work, had been ‘‘brought up to normal operating levels’’.
He reiterated that all unpaid wages had now been paid, and that payment plans had been established with government agencies.
Mr Singh praised and thanked all employees for their support shown over the last four months.
Gujarat offer hugely under-subscribed
Gujarat NRE Coking Coal’s latest attempt to raise $49.85million has failed, after shareholders elected to buy less than 1per cent of the new shares on offer from the company.
Under the issue, which closed on Friday last week, eligible shareholders applied to buy just 2.1million of the 628million shares available, raising about $176,000.
The under-subscription is perhaps unsurprising, after chairman Jasbir Singh warned any further investment in the troubled mining company would be ‘‘highly speculative’’ and ‘‘not risk free’’ in December.
New company owners Jindal Steel spent $58million on new shares through an accelerated version of the shareholder offer, which has been used to pay workers and clear debts.
However, it remains unclear how Gujarat plans to raise the rest of the $49.85million it had hoped to gain from the latest deal.
About $10 million was to be used to pay further creditors, while $40million was earmarked to continue running the company.
This week, the company told the stock exchange it was ‘‘investigating its options’’ over what to do with the remaining 626million shares.
The massive shortfall of new stock sold indicates former chairman Arun Jagatramka’s Gujarat Group declined to take up its portion of shares.