By Alois Vinga
ZIMBABWE Stock Exchange (ZSE) listed nickel miner, Bindura Nickel Corporation has transferred $3 billion worth of shares to the new purchaser believed to have close links with business tycoon, Kuda Tagwireyi.
This follows Sotic International Ltd, a Mauritius-based firm’s finalisation of a 74.73% stake acquisition in the company (BNC) from Asa Resource Group Plc.
Sotic owns Zimbabwe’s Landela Mining Venture Ltd and is linked to Kuda Tagwireyi, one of President Emmerson Mnangagwa’s close allies and adviser who also has investments in chrome mining, fuel, agriculture and banking sectors of the country.
An update to shareholders by the BNC company secretary Conrad Mukanganga this week said the Tagwireyi linked firm, Sotic nominated its preferred company to receive the shares.
In terms of the agreement, Sotic or any of its nominated associates would receive transfer of shares from Zimnick, Mwana and Asa Gold.
Sotic and its associates nominated Kuvimba Mining House (Private) Limited as the entity receiving the shares.
“The shares transferred from Zimnick, Mwana and Asa Gold to Kuvimba Mining House (Private) Limited was ZWL$3.4 billion. The Company applied for a waiver to make an offer to its minority shareholders and the waiver was granted by the ZSE,” said Mukanganga.
Mwana Africa, Zimnick and Asa Gold held a combined 74.73% of the entire issued share capital of the company and consequently, Sotic is now the indirect holder of such shares.
The transaction was procedurally conducted through a cautionary statement to shareholders which was published on 29 October 2019 revealing details of transaction.
The shareholders were subsequently notified of the consummation of the transaction when BNC published its financial results and notified its shareholders of the change of directors as appointed by the purchaser.
Tagwirei is expected to inject the much needed US$500 million for capital expenditure to increase production.
BNC suspended a project to revive its smelter due to reducing nickel prices which were too low to justify the investment.
Since the project began in 2015, nickel prices have averaged US$12,000 per tonne, according to the company’s last earnings report.
However, BNC has said it needs a nickel price of US$16,200 per tonne for the project’s investment to deliver returns.