Liquidator handpicks Mowana mine buyer
Chakalisa Dube | Friday September 23, 2016 18:00
However, officials at PricewaterhouseCoopers (PwC) who have been appointed to facilitate the liquidation process have said the name of the company that has won a bid to buy the mine will only be announced on or after October 7.
“Our preferred bidder was selected some weeks ago. We are still finalisng negotiations for the sale of the mine,” PwC managing director (MD), Butler Phiri told BusinessWeek on Wednesday.
Phiri said the preferred bidder is a company that originates from outside Botswana.
The MD however refused to shed light on the amount the preferred bidder is willing to pay for the mine citing a strict confidentiality clause.
In July this year, six bidders from Botswana and abroad tabled bids to purchase the mine. Liquidators have also remained secretive about the names of the six bidders.
The potential bidders initially carried out due diligence process on the mine with the assistance of PwC. The process entailed assessing the extent of ore reserves, quality of the plant amongst others in order to help bidders draw informed bids.
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 it on good authority that Mowana’s creditors are its parent company, ZCI Limited.
For a notable number of years, ZCI has become known as the chief financier of 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 base metal prices that have been on a free fall in recent years. The liquidation of Mowana mine resulted in close to 400 people losing their jobs.
The latest developments will serve as great news to residents of Dukwi and surrounding areas who saw their economies spectacularly collapse following the closure of Mowana.