Bidding for Mowana Mine closes
Chakalisa Dube | Friday July 15, 2016 12:24
As much as nine companies had initially expressed interest to buy the mine that was put under liquidation last November. A senior official from PriceWaterhouseCoopers (PWC) whose organisation is tasked with carrying out the liquidation of the mine confirmed this week in an interview.
“We have received six bids for the mine and we will begin a process to assess them soon. I cannot disclose the name of bidders at the moment due to a confidentiality clause we have with them (bidders),” said PWC managing director, Butler Phiri. He said the six bidders are from Botswana and abroad. Phiri added that three bidders decided to withdraw their proposals at the 11th hour. Phiri also declined to reveal how much the bids are worth citing a confidentiality clause. “The sale of the mine is expected to be completed before the end of August,” Phiri explained. PWC recently carried out a due diligence process with potential bidders of the mine. The process ended on June 30 paving way for potential buyers to submit formal bids. During the due diligence process the potential bidders assessed the extent of ore reserves, quality of the plant among others in order to inform their purchase bids. Eight mining companies attended the due diligence process and were said to be content with the status of Mowana.
Mowana was placed under liquidation in November last year after failing to pay its creditors. One of Mowana’s contractors, Diesel Power (DP) had applied for the mine’s liquidation over a P47 million debt. In 2014, DP signed a P1.2 billion contract to carry-out mining works at the former. The liquidators have refused to reveal the names of those owed by the mine. However, BusinessWeek has learnt that Mowana’s creditors amongst others include its parent company, ZCI.
For some years, ZCI was financing operational costs at Mowana and Thakadu, which also ceased operations in 2014 because it was deemed a non-viable entity. ZCI is owed a combined $107 million by African Copper for financing operations at Mowana and Thakadu.
Puma Energy and Global Holdings are also some of the prominent companies owed by Mowana. Mowana said it could not pay its creditors as it was struggling due to low metal prices that have been significantly declining in recent years. The liquidation of Mowana Mine saw close to 400 people losing their jobs.