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Nqobile Bhebhe, [email protected]

BINDURA Nickel Corporation (BNC), listed on the Victoria Falls Stock Exchange and currently undergoing reconstruction, will soon have its administrator carry out investigations into the company’s operations and finances.

This step is to devise the most appropriate revival strategy, in accordance with the mandates of the Reconstruction Act. The mining entity was subjected to reconstruction in May. In issuing the reconstruction order under Section 4 of the Reconstruction of State-Indebted Insolvent Companies Act (Chapter 24:27) (No. 27 of 2004), Minister of Justice, Legal and Parliamentary Affairs, Ziyambi Ziyambi, appointed Ms Mutsa Mollie Jean Remba as the administrator.

Mr Ian Mtetwa is the assistant. Under this Act, the relevant minister is empowered to issue a reconstruction order when there are indications of fraud or mismanagement, leading to doubts about a state-indebted company’s ability to repay any credit received from public funds.

The reconstruction order confers upon the administrator the power, subject to the rights of the creditors of the company, to raise money in any way without the authority of shareholders for the reconstruction of the company.

The nickel company had cautioned that low nickel prices, high input costs — particularly electrical expenses — substantial mining depth, and low resource grade persist in negatively impacting its operations.

It noted that despite the completion of the Sub-Vertical Rock (SVR) Project, which caused a temporary shutdown of BNC’s Trojan Nickel Mine (TNM) from September 22, 2023, it continued to encounter various challenges that are expected to cause delays in the resumption of mining activities at TNM.

In the latest shareholder update, acting finance director, Mr Simon Masvipe, said due to protracted operational challenges, BNC could not timeously extinguish its debts, including those owed to the Government which issued a Reconstruction Order against Trojan Nickel Mine Limited, a wholly owned subsidiary of BNC.

He said under the Reconstruction Order, which took effect on May 2, 2024, the Reconstruction Order equally applies to BNC by association.“The reconstruction of BNC requires a temporary suspension of trade in its securities. From 6 May 2024, in compliance with section 8 of the Securities and Exchange (VFEX Listings Requirements) Rules, 2020 and the Reconstruction Act, the trading of BNC securities was suspended by the VFEX Listings Committee.

“In addition, the Company applied for a waiver to publish its Financial Year 2024 Audited Financial Statements, based on Section 9 of the VFEX Listing Rules, in order to allow investigations and reports undertaken in terms of the Reconstruction Act to be done,” he said.

Mr Masvipe noted that on July 15, 2024, the VFEX Listings Committee granted the waiver on the condition that the BNC Audited Financial Statements would be published by December 31 2024.
“Shareholders are hereby informed that the Administrator is working on initiatives to meet the requirements of the Reconstruction Act, which include conducting investigations into the operations and finances of the business to recommend the most suitable resuscitation plan going forward.

“The Reconstruction Act sets out processes to be followed to engage with creditors and shareholders and present these findings, as well, in a later course, as a plan for the reconstruction of the company (the “Scheme of Reconstruction).”

The administrator is expected to share the proposed dates for the first meetings of creditors and members of the Company and TNML in the next notice to shareholders. In the trading update for the quarter ending December 31, 2023, the company emphasised that nickel prices remain subdued in the global markets, reaching economically unsustainable levels for the business.

Internationally, nickel prices on the London Metal Exchange witnessed a notable decline, attributed to market surplus conditions resulting from increased production in China and Indonesia coinciding with subdued global demand.