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Tati Nickel ordered out of liquidation

Tati Nickel is out of liquidation ....for now
The High Court on Tuesday broke new legal ground by ordering Tati Nickel Mining Company out of liquidation, in a move that its liquidator says is "unprecedented, incomprehensible, unfathomable" and which could trigger a stampede by creditors owed P1 billion by the mothballed operation.

In a terse and tense session on Tuesday morning, Justice Zein Kebonang discharged the rule nisi which had given Tati Nickel the cover of provisional liquidation since October 2016 when it shut down as part of BCL Limited.

Lawyers representing the liquidator, Nigel Dixon-Warren, had gone to court seeking an extension of the provisional liquidation, arguing that six more months were needed to finalise a deal involving indicative offers from at least two bidders.

Legal eagles told BusinessWeek the decision effectively hands Tati Nickel back to its majority shareholder, the Government of Botswana, and opens it up to claims from creditors, workers and others. Tati Nickel has no board, management or workers at the moment, but owes about P1 billion with BCL Mine being the major creditor.

On Tuesday, Kebonang was resolute in dismissing Dixon-Warren’s attorney, Msiya Kandiano of Bookbinder Business Law.

“You are saying you have received two non-binding indicative offers, but then you say you are short-listing bidders, yet there are only two of them.

“Then you say, following this, the short-listed will be invited for something else; this seems to be an unending process.

“There is also uncertainty because you say these are non-binding offers. There is very little to go on, according to the documents you have put here.

“I am going to decline an extension because there’s no adequate basis for it from the information you have given me. There’s nothing warranting an extension.

“I’m going to discharge the rule nisi issued because there’s little to go on,” he said.

Kandiano unsuccessfully requested the court to grant seven days within which to file supplementary documents to address Kebonang’s concerns. “Perhaps you didn’t hear me. I’m going to discharge the rule nisi. The written reasons will follow,” the judge continued.

The High Court had granted the liquidator an extension to the provisional liquidation in December, after presentations indicating there could be offers for Tati. This time around, papers filed by Dixon-Warren pleaded with the court for more time to finalise the latest offers.

“The following is the process I now need to undertake in order to

proceed with the potential transaction. (I need to) evaluate all the offers received and invite short-listed bidders to the next phase of the tender process.

“I anticipate that a confirmatory due diligence phase will commence on or about April 16 and will continue for approximately four to six weeks.

“Following this, the short-listed bidders will be invited to submit a final binding offer for my consideration. I intend to evaluate all binding offers received and select parties with whom to enter into final negotiations with a view to conclude the formal sale agreements as expeditiously as possible,” the liquidator said.

By Wednesday, the liquidator’s lawyers were scrambling to appeal Kebonang decision and also seek an interdict on the order that Tati Nickel move out of liquidation.

Dixon-Warren told BusinessWeek that the High Court’s decision was “incomprehensible”.

“The company is insolvent. That decision is unfathomable and as the biggest creditor to Tati Nickel, being BCL, I am challenging that decision at the Court of Appeal.

“Tati Nickel has no board or management and no way to settle its debts. “This decision opens up a whole new batch of problems to be dealt with.

“An appeal could take a little bit of time and we would want an order freezing Tuesday’s decision in the meantime,” he said.

Dixon-Warren said their legal opinion was that if the Court was dissatisfied with the progress being made with Tati Nickel, the judge should have ordered it to go into final liquidation, not remove it from liquidation.

“If he was convinced that interested parties could offer a deal, then he would extend the provisional liquidation and if he wasn’t, he should have put it in final liquidation.

“This decision is unprecedented,” Dixon Warren said. Tati Nickel entered provisional liquidation early October 2016, after government filed at the High Court for liquidation proceedings against its wholly-owned BCL Ltd group. Even though analysts are convinced Tati is the group’s most financially viable asset, the months have rolled on without a takeover deal, leading unionists and even legislators, to criticise the liquidator and the liquidation process.




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