Rival bid for BCL against EIH
Brian Benza | Friday May 19, 2017 18:00
Provisional liquidator, Nigel Dixon-Warren told Mmegi BusinessWeek on Wednesday that he has received a high level offer from a company within the SADC region, which is interested in primarily buying Tati Mine at this stage and possibly BCL when the final liquidation takes place.
The bid comes as EIH is reported to be preparing an offer for the BCL Group, which includes BCL Mine, Tati Mine and the Nkomati Mine’s stake.
According to Dixon-Warren, EIH had been granted an exclusivity period, which lapsed at the end of April and the process was now open to other suitors. “EIH had an exclusivity period until April 30, 2017 where they were the only company we were dealing with. Since I am not aware of an offer EIH made within that period we have opened the bidding to everyone for the sake of the creditors,” he said.
“I have since received a bid from another company that is only interested in Tati Mine for now and maybe other assets at a later stage.”
Last week Minerals, Energy Security and Green Technology minister, Sadique Kebonang told Mmegi BusinessWeek that government has signed an memorandum of understanding offering BCL to EIH for a token price of $1 with the Emirati firm, in return, expected to take over the liabilities of the mothballed mine including the obligation to pay for the disputed 50% stake in Nkomati Mine.
At the time when BCL was placed under provisional liquidation in October last year, its creditors amounted to close to P1 billion while Norilsk Nickel is demanding $271 million (P2.8 billion) for the Nkomati Mine stake.
According to Kebonang, EIH was expected to complete its due diligence on the Nkomati Mine by last Friday after which they would table an offer to cover BCL creditors and Nkomati.
With a second bidder now in the picture, Dixon-Warren said it would be up to the creditors to decide which offer was most competitive.
“Whatever offer will be made, the creditors will have the final decision. But with the current lawsuits that have been instituted by Norilsk, we might have to engage the Russians to allow us to sell if we get a firm offer,” said Dixon-Warren, who declined to name the second bidder.
The provisional liquidator has thus far asked for three extensions at the High Court as government was still negotiating with the potential investors. Dixon-Warren also revealed that they had invited the biggest three Nickel mining companies in the world to make an offer for BCL but they all declined, largely due to the Norilsk lawsuit.
“We have approached Anglo, Glencore and Norilsk themselves, but nothing fruitful came out. There have been other investors that have shown interest as well, but they have said they will wait until the outcome of the Norilsk litigations,” he said.
The amount that Norilsk is demanding for the 50% stake in Nkomati is likely to be a sticking point in any further negotiations. It is understood in mining circles that at $270 million, the Nkomati stake in highly over priced as African Rainbow Minerals (ARM), the holder of the other 50% stake in the South African mine, has valued their stake at around $130 million.
Despite efforts by the government and the provisional liquidator to find a buyer and settle off creditors and Norilsk, the Russian company recently announced that it will press ahead with a lawsuit against Botswana over the failed $271 million deal even though the government is still trying to raise the funds.
“From our point of view the government failed to meet its obligations. To at the end of the deal fail to pay the deal price is simply unacceptable,” chief executive, Michael Marriott, said. Norilsk is awaiting a Botswana court ruling before arbitration on the matter can begin in London, United Kingdom.