Sinokubonga Nkala
Business Reporter
BINDURA Nickel Corporation (BNC), which is under reconstruction, says after in-depth investigations into the operations and financial health are done, mining development and further exploration will precede the resumption of operations.
The Victoria Falls Stock Exchange-listed firm is undergoing restructuring under administration as of 2 May 2024, following the issuance of a Reconstruction Order by the Government of Zimbabwe.
The order was issued pursuant to the Reconstruction of State-Indebted Insolvent Companies Act (Chapter 24:27) (the “Reconstruction Act”).
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.
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.
In an update to shareholders, Operations Manager Mr Jacob Kasumba said the Administrator has been working to fulfil the requirements of the Reconstruction Act.
He said several key activities have been undertaken.
“In-depth investigations into the operations and financial health of BNC and TNML and measures to address these in the future are ongoing.
“These will in due course assist in the development of a sustainable restructuring plan. It has been noted that, once the model and funds are in place, mining development and further exploration will precede the resumption of operations,” said Mr Kasumba.
He noted that the Administrator is actively engaging with various stakeholders including the State, employees, lenders and regulators during this time.
“The Administrator is exploring various financial restructuring options to address the Company’s debt obligations and improve its financial position.
“Staff optimisation and revision of HR costs is a key approach. Many more will be employed.
“A comprehensive review of BNC’s operations is being conducted to identify potential cost-saving measures and opportunities for operational efficiency,” he added.
Mr Kasumba noted that BNC remains committed to working diligently with the Administrator to emerge from this challenging period stronger and more resilient.
Trading in the shares of nickel producer were halted on the stock exchange after its major asset, Trojan Mine, was placed under reconstruction.
This came as the resources group faced operational challenges amid subdued global nickel prices, which have dropped about 25 percent yearly.
Although the reconstruction order was issued against Trojan Mine alone, which is the country’s primary nickel producer, this would have an impact on the entire group, resulting in its suspension, which is the first suspension at the US dollar-denominated exchange.
