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BNC creditors accept settlement plan

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Over 90% of Bindura Nickel Corporation (BNC)’s trade creditors have accepted the group’s settlement plan, but management is still to get the nod from Zesa, Zimra and staff, chief operating officer Batirai Manhando said yesterday.

Manhando said BNC was in discussions with Zesa and Zimra, adding he was optimistic the talks would yield positive results.

He said he was encouraged by the positive reaction by staff to offers presented.

To date, BNC has received acceptance from many staff members, but Manhando said that more acceptances were required.

He indicated he might consider a short extension to the deadline for staff to respond.

Manhando urged the remaining staff to take advantage of the opportunity presented to them that would benefit not only individual staff members, but allow the organisation to restart its Trojan Nickel Mine.

The move would result in knock-on benefits to the community and the country as a whole, he said.

Should Zesa, Zimra and staff not take the settlement plans offered by BNC, Manhando said the company faced the risk of liquidation. The company’s shareholders approved all resolutions required to implement the envisaged transactions which were put to the vote at an extraordinary general meeting in Harare three weeks ago.

The transaction involves a rights issue for $21 million whereby all shareholders were given the opportunity to invest in BNC.

Mwana Africa currently owns 52,9% of BNC’s total issued share capital.

Sources close to BNC indicated that Mwana’s shareholding could drop to below 50%, if all shareholders followed their rights to invest and a large portion of staff and creditors accepted shares as part of their packages.

However, until all the responses were received from shareholders, creditors and staff on the number of shares they would take, the final shareholding in BNC to post the rights issue and restructuring would remain uncertain.

Although shareholders have given the green light, the rights issue can only proceed if BNC reaches a consensus with creditors and with staff on the settlement of retrenchment and backpay costs.

Manhando said the response from trade creditors was encouraging and, while discussions were still underway with Zesa and Zimra, he felt confident a workable solution could be reached.

In the event of liquidation, he said, staff and creditors stood to receive much less than they were being offered in the settlement packages. “Liquidation would mean everyone loses,” Manhando said.

While it was understandable that creditors and staff were disappointed not to be receiving their payouts completely in cash, the reality was the company did not have sufficient funds to pay everything in cash and fund the restart.

He said: “The offers made to staff and creditors include a mix of cash, shares and assets which at least ensures these stakeholders receive something while ensuring the first phase of the BNC restart is viable.”

Finance minister Tendai Biti last week said the government had granted BNC a special dispensation which allowed the mining company to import equipment duty free.

“In the case of Bindura Nickel Mine, the government has accorded the company National Project Status and accordingly extended fiscal incentives, which will allow duty-free importation of equipment, thereby facilitating the resumption of operations before the end of year,” he said.

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