May 15, 2017 / 6:01 PM / 3 years ago

Botswana proposes debt for equity deal for troubled BCL Mine

GABORONE (Reuters) - Botswana’s government has offered its state-owned BCL Mine Ltd to the Emirates Investment House (EIH) for a token price of $1 in a deal that will result in the Emirati firm taking over the mine’s debts, minerals minister Sadique Kebonang said.

Since being placed under provisional liquidation in October for an initial period of four months, the High Court has granted two extensions to BCL as the government negotiated with potential buyers.

BCL Mine (BCL) was placed under provisional liquidation after its creditors demanded close to 1 billion pulas ($96 million).

“We have signed a Memorandum of Understanding (MOU) with EIH. The proposal is for them to take up all of BCL debts including Nkomati for a token fee,” Kebonang said.

BCL employed more than 5,000 people directly before it was placed under provisional liquidation in October and it was once the lifeblood of the Selebi Phikwe mining town of more than 50,000 residents.

After BCL was placed under provisional liquidation, Russia’s Norilsk Nickel took legal action against the mining group to recover $271.3 million it says it is owed for the sale of a 50 percent stake in the Nkomati JV in South Africa.

($1 = 10.3734 pulas)

Writing by Tanisha Heiberg, editing by Louise Heavens

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