Creditors of Mowana Mine have approved the takeover deal proposed by a Dutch wealth manager who has offered to clear up to P800 million they have been owed since the copper mine went into judicial management in December 2018.
“Please note this is an ongoing process and approval of creditors is one step in the right direction but the conclusion will not be reached until after sanction of the scheme,” he said. “Sanction will only be given if all conditions precedent are concluded.”
The proposed deal and the creditors’ approval will be taken to the High Court soon for sanction, clearing the way for Mowana Mine to restart operations.
Documents previously seen by BusinessWeek indicate that Max Power Limited, a company run by Dutch wealth manager Gregory Elias, is offering full and part payment for creditors according to their classification. Smaller trade creditors with proven claims of less than P250,000 will get full payment, while those with higher claims will get 25 thebe of every pula owed above P250,000.
Employees who worked up to the judicial management and those who worked under the care and maintenance period that followed will also have their outstanding amounts settled. Previously, BusinessWeek reported that Mowana Mine’s workers were owed a collective P7.2 million for unpaid salaries dating back to October 2018, as well as historical bonuses.
Outstanding amounts to government such as taxes and royalties will also be settled in full. Mowana owed the tax collector P13 million in unpaid Value Added Tax and Pay As You Earn (PAYE) obligations at the time of its closure. Documents previously seen by BusinessWeek showed that from January 2017, the company deducted PAYE worth about P6 million from its workers, but did not pass this along to the BURS.
Hinchliffe previously told BusinessWeek that implementation of the proposed scheme would ensure that the future of Mowana Mine is secured and would bring significant economic benefit to Botswana “for many years to come”.
“Benefits include revenues for the government in terms of taxes and royalties, secure employment for over 300 people and payment in full to all former employees of their terminal benefits. “There will also be significant benefits to the local economy both at business and individual level,” he said.
Preparations for Mowana Mine’s reopening are reportedly progressing steadily with 328 workers employed on site. About 400 workers lost their jobs when the copper mine near Dukwi went into judicial management in December 2018. At the time, the troubled mine had been resuscitated from a liquidation dating back to 2015.
Max Power Limited will be hoping to avoid Mowana Mine’s previous cash flow troubles as copper prices are trending at high levels this year, on the back of the global recovery and inventory shortfalls in key markets.