HARARE- Bindura Nickel company, which into the mining of nickel in Zimbabwe, is set to get a new majority shareholder. In a cautionary statement released on Thursday, the company said majority shareholder ASA Resources has entered into a sale and purchase agreement with a third party.
The third party is identified as a Zimbabwean based mining entity with interest in mining and production of ferrous metals, non-ferrous metals and precious metals.
The agreement is in relation to a 74.73% majority stake held ASA in BNC. ASA resources formerly Mwana Africa, was listed on the LSE’s AIM, before being suspended on 27 July 2017at the request of the company following a delay in fixing a deep cashflow crisis.
In 2018 at least 10 companies owned by ASA Resource Group (Asa) pleaded insolvency, accusing Chinese executives of breaching exchange control regulations and these included BNC and a gold mining company, Freda Rebecca.
In March 2019, BNC withdrew a 3 months cautionary statement highlighting that discussions between its parent company ASA and a third party relating to the sale of the stake in question has been terminated.
BNC has insisted that it is solvent enough to meet its operational cashflow demands. However, the company has not completed the smelter plant which was scheduled for a restart in 2018.
The plant is at 83% completion and has not seen an additional works due to what the company said are viability concerns under the current conditions. The conditions cited include weak prices of nickel, low matte production and power challenges.
Getting a new acquirer will likely see improved capital injection into BNC operations which may speed up other mining activities and perhaps the smelter, thus unlocking significant value for the company whose shares have been grossly undervalued on the ZSE.
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