BNC in debt, equity swap

million ordinary shares were placed under the ownership of employees and other creditors in exchange for US$11,5 million owed to them.
“Shareholders are further advised that following the private placement, the company’s liabilities due to employees and creditors who have selected the deferred payment plan now stand at US$10,6 million,” it said in a statement.
The employees were owed severance packages and backpay with some reported to have been given houses to settle the debt.
BNC is looking to restart operations at Trojan Nickel Mine which were placed under “care and maintenance” in 2008 following a US$21 million rights issue.
“With the restart programme now underway, the board is confident that the company will be able to meet these obligations as they fall due,” BNC said in reference to the remaining debt owed to employees and creditors.
Only 1 percent of BNC workers opted out of the debt-equity swap deal preferring to be paid in cash.
Mwana Africa, which is BNC’s parent company, said recently funds raised through the rights offer would allow the miner to restart operations but noted that the company still required further capital injection.
“The proceeds are sufficient to restart the Trojan Mine, although further funding will be required by BNC within approximately 12 months to provide sufficient working capital to take BNC through to being cash flow positive,” Mwana Africa said.
BNC is expected to conduct its first sale of nickel concentrate seven months after resumption of operations at Trojan Mine.
An agreement for the sale of nickel has already been struck with Glencore International.
Mwana Africa PLC is a pan-African, multi-commodity resources company with operations in the Democratic Republic of Congo, South Africa and Zimbabwe. — New Ziana.