JSE-listed Labat Africa, which is being bought out by a subsidiary of Aurora Empowerment Systems, needs to get shareholder approval to go into mining.
Last month, Labat told shareholders it was buying two gold processing operations on the East Rand from Aurora for R38 million, which it will pay for by issuing 38 million shares at R1 each.
However, yesterday the company said that because the deal is a related party transaction, as well as being classified as a reverse takeover, it will need to acquire a fairness opinion, as well as shareholders' approval.
Moreover, says Labat, its continued listing depends on the JSE's approval of the suitability of the businesses acquired through the acquisition or any other assets that Labat may acquire.
Labat is being bought out by Aurora Investment Holdings, a subsidiary of controversial mining company Aurora Empowerment Systems, for 5c a share. Labat's share is trading at 70c.
Link, Labat's majority shareholder, has sold 45.7% of Labat to Aurora. Aurora recently made headlines when four apparently illegal miners were shot and killed, allegedly by security guards, at one of its East Rand mines.
Link will buy out Labat's original operations, South African Micro Electronic Systems, Integrated Circuit Design Centre and Labat Africa Consulting for R4.5 million. Link will lend Labat R4 million, which will be offset against the purchase price.
Once the purchase of the gold processing plants has gone through, Aurora will own 72.3% of Labat.
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