African Copper Plc, the owner of the Mowana mine, said this week that it had paid Natasa Mining Limited outstanding debt which sparked a court case that would have seen the company going belly-up.
In statement issued out on Tuesday, African Copper said it had “unconditionally paid to the account of trustee of the holders of bonds issued by ACU (African Copper) wholly owned subsidiary Missena Copper Botswana P 153 million or US $ 20.4 million, being the full principal amount owing under the bonds together with accrued but unpaid interest”.
“In addition, ACU paid P 15.7 million to the account of Natasa solicitors being aggregate amount , less certain deductions in relation to some disputed claims, owing to Natasa as a result of debts of Messina’s trade creditors acquired by Natasa,” the company said.
The move is expected to lead to the withdrawal of a legal case filed by Natasa Mining Limited after it lost the bid for African Copper to Zambia Copper Investments (ZCI). Natasa had demanded African Copper to pay its debt or face liquidation and also rallied bondholder to ask African Copper to redeem their bonds in full.
Further, the developments are expected to pave the way for mining operations that will see some new cash injections as a result of sales.
African Copper is planning to start mining operations in the next three months after it got an injection of US $ 10 million last week from its Zambia Copper Investments (ZCI), as part of moves to help the country’s budding miner to get off its feet.
African Copper sold 6,766,705 shares worth about US $ 9.9 million last week that gave ZCI an interest in the organization of 82 percent .
The money was in addition to the extra US $ 25.4 million which it injected from the US $ 22 million loan facility. That move is expected to move back the legal threats posed by Natasa Mining Limited ÔÇöthe Australian company whose bid was rejected ÔÇô in suing the miner for not accepting its bid.
“We are currently working on a new mining plan and the plan is to re-start operations within three months,” African Copper’s Chief Executive Officer, Chris Federicks, said.
The company also de-listed from the Toronto Stock Exchange saying that London market will be able to serve the rest of Europe and northern America.
The new loan facility that was re-negotiated during the beginning of last week will see African Copper and its subsidiaries being given up to US $ 25.4 million which ZCI claims that it is enough to pay in full bonds acquired by Natasa, which are said to be carrying a face value of US $ 21 million or 149 million Botswana pula.
The move means that the offer is being pushed up from the initial US $ 22.5 million that was announced at the beginning of May.
“As a result of the new funds being provided to ACU (African Copper) under the loan, ZCI and ACU have agreed to reduce the amount of the previously announced US $ 10 million bridge finance loan by US $ 3 million because compromise agreements that have been reached with Messina’s (African Copper subsidiary in Botswana) two largest trade creditors directly by ZCI and, therefore, these other funds are not required.
“Small creditors will be repaid in full in cash from the proceeds of the financing package as their debts become due,” ZCI had said.
African Copper Plc was slapped with a law suit earlier this month just days after it rejected Natasa’s offer.
African Copper, which shut a mine in January after running out of cash, fell the most in London trading since going public in 2004 after the holder of a bond issue demanded immediate repayment.
The African Copper, London AIM, and Botswana listed company is operating Mowana mine which is about 100 kilometers west of Botswana’s second largest city, Francistown.