BNC shareholders face 25pc dilution

creditors will assume a 24,89 percent shareholding in BNC.
Major creditors, mainly from South African companies, are owed about US$16,2 million. Locally, Zesa is the biggest creditor.
This will take effect even if shareholders follow their rights in the proposed US$21 million rights issue to fund the restart of Trojan Nickel Mine.
Major shareholders Mwana Africa would be diluted from 52,87 percent to 46,61 percent while Climax Investments would be reduced from 14,26 percent to 8,62 percent. National Social Security Authority controls 7,66 percent and they would be diluted to a mere 4,63 percent.
To complete the top five shareholders Tanvest Limited and Barclays Zimbabwe Nominees will give up from 3,50 percent to 2,12 percent and from 2,49 percent to 1,51 percent respectively.
BNC said creditors would also be offered a deferred payment option depending on which option creditors select. The nickel mining company is also finalising its employee retrenchment exercise and backpay liabilities to pave way for the rights offer.
Mwana Africa, through its subsidiary Zimnick Limited, is acting as underwriter for the issue.
BNC shareholders will be asked to approve the rights issue at an Extraordinary General Meeting on June 29, following which — assuming approval is received — the rights issue is planned to close on July 27.
Completion of the rights issue is conditional upon, inter alia, satisfactory resolution of legacy creditor, staff retrenchment and back-pay liabilities at BNC, in such a way that makes the restart of Trojan viable.
Directors are also proposing authority and control to issue the remaining authorised shares, some of which may be used to settle the obligation to employees.
BNC recently made an offer that would settle both retrenchment and backpay liabilities that includes a combination of cash, deferred cash, houses and shares. It currently has a staff complement of over 2 000 employees.
BNC’s offer tries to balance labour’s demands and expectations with the practicality of leaving sufficient cash in the business to allow for a viable Trojan restart. 
If parties fail to agree, BNC is likely to go for liquidation. Following improving economic and operating conditions in Zimbabwe, BNC’s directors have considered a number of potential restart scenarios.
They have decided to do this in phases, starting with Trojan, which will initially produce concentrate.
In February last year, BNC entered into an off-take agreement with Glencore, whereby Glencore would purchase all of the concentrate produced at Trojan.
BNC is listed on the Zimbabwe Stock Exchange and owns the only integrated nickel mine, smelter and refinery operation in Africa.
The company also owns and operates the Shangani Nickel Mine and a smelter and refinery, all of which are currently on care and maintenance. 
In addition to these assets BNC owns the Hunters Road nickel project in the Southern Greenstone belt.