Tuesday, March 5, 2024

BCL caught up in Russian roulette

Russian company Norilsk Nickel, who are partners with billionaire Patrice Motsepe at Nkomati Mine, have announced that they intend to take BCL to court for breaching a sales agreement. Norisk’s Vice President, Investor Relations, Vladimir Zhukov, said on October 17, 2014 that his company announced that it had entered into a binding agreement for the sale of its African assets to Botswana-based BCL Investments, which is controlled by the Government of Botswana.

Sunday Standard can reveal that in September 2014, a month before the sale agreement was made, Motsepe was a guest speaker at a Botswana Democratic Party (BDP) gala dinner were he pledged to donate P1 million to the party which was then building a war chest for the general elections. The deal between BDP and Motsepe was partly brokered by the then BDP Secretary General Mpho Balopi who had also partnered with BCL at Pula Steel. The P1 million donation to BDP, however, came with strings attached; the conditions of the deal however have been kept secret.

Sunday Standard can reveal that Motsepe has not paid the P1 million he had pledged because the BDP did not fulfil all the conditions under the secret deal. Motsepe owns 50 percent of Nkomati mine while Norilsk Nickel owns the other 50 percent. Zhukov stated last week stated that “all of the conditions precedent to the transaction were duly fulfilled. In particular, in September 2016, the last remaining condition precedent was fulfilled when the Company obtained the consent of South Africa’s Department of Mineral Resources to proceed with the sale of the 50 percent interest in the Nkomati JV,” he said.

Zhukov said Norilsk provided the buyer (Botswana Government) with additional time to close the transaction; however, BCL Investments made no effort to fulfil its obligations.  He added that on October 8, 2016, the Norilsk learned from the media that BCL had been put into provisional liquidation. “Following these developments the Company has decided to defend its interests under the transaction in courts with jurisdiction over the matter,” he said.   Botswana recently withdrew its decision to buy a 50 percent stake in South Africa’s Nkomati mine from GMK Norilsk Nickel PJSC saying it could not afford the price tag of just under P3 billion ($279 million). “The kind of situation we are in, (is) where’s that money is going to come from,” Kahului Focsani, BCL Chairman told reporters in Gaborone. BCL is now being managed by a provisional liquidator.  

In 2014, BCL agreed to buy 50 percent of the Nkomati nickel mine and 85 percent of Tati Nickel Mining Company located in Botswana, from Nornickel, which is among the world’s biggest producers of the metal, for $337 million. The company said in April it would raise $250 million in a bond sale to help fund the purchases. It is understood that after BCL reneged on the agreement with Norilsk because government would not raise the P3 billion for the deal, the government enclave feared that Norilsk would apply for the liquidation of BCL and decided to beat the Russian investor to the hammer. It has also emerged that the ruling BDP has also not received the P1 million pledged by Motsepe because the party had not honoured some parts of their secret deal.q


Read this week's paper