Monday, October 25, 2021

Creditors first, job losers after

Only the creditors are on the provisional liquidator’s mind in dealing with the BCL saga 

Nigel Dixon-Warren, the appointed provisional liquidator to the insolvent companies – BCL Ltd, BCL Investments (Pty) Ltd and Tati Nickle Mining Company – made it clear that the only interests he is looking after during this process is that of the companies owed by the BCL Group, referred to as creditors.  

The primary duty of the provisional liquidator, he told Journalists on Tuesday last week in Selibe-Phikwe, is to secure and maintain BCL assets so as to retain some value to be able to make payments once the final liquidation has taken place. 

Dixon-Warren explained that this includes understanding what caused the companies to close as well as assess the possible opportunities to try and salvage some value which hopefully would be positive for attracting investors to the sale of the assets. 

This is the reason, he said, the mines were currently on care and maintenance, which includes among other things, to keep the mines free from water which accumulates underground. 

The safeguarding of the assets is the responsibility given to Dixon-Warren to which he is empowered to take decisions believed to be in the best interests of the creditors. 

He could not determine who all the creditors were but said he would only truly know after they had submitted their claim forms at the first meeting. In Two local banks, First National Bank Botswana and Standard Chartered Bank Botswana, released through the Botswana Stock Exchange cautionary statements advising their shareholders to deal cautiously with the banks’ stocks until the financial results are announced which will contain full details on the impact of BCL liquidation. 

 

Barclays Bank Botswana, on the other hand, assured its shareholders that its exposures to BCL Group are fully secured citing that the bank remains sufficiently liquid and well capitalised to continue with business.  

When commencing his job Dixon-Warren found as he put it that the “companies had put themselves in a fatally insolvent position”. This he explained means that the companies had no money or rather very little of it which led him to approach government on the grounds that if he was to carry out his job he needed funds to do so. On hearing his case, he said, government heeded to his request to which he said did so to find out from an independent party if something could be salvaged from the mines. 

“Unfortunately the companies had no money or very little money when I arrived, I then approached government to say if I’m to try and preserve the value of these assets whilst we do our work then I need assistance, government stepped in,” he said. He, however, could not disclose to this publication how much government assisted. “I’ve been provided with sufficient funds to settle terminal benefits of employees and to cater for care and maintenance which for about 400 people,” he said. Asked further if the funds would be enough to last to the end of the liquidation process, Dixon-Warren responded by saying that the funds were likely to stretch until between March and April. This, he said, could mean that he requests for extended assistance should there be a need to do so. 

Dixon-Warren quashed the rumours that he may be in a position to offer financial assistance for BCL’s former employees, clarifying in that regard that it fell outside his responsibility adding that it would be the decision of government to extend any other assistance. 

He also mentioned that ordinarily payments to employees were done on completion of the final liquidation process but, however, in the case of BCL government made the decision to pay out terminal benefits to the mines’ former employees from a socio-economic perspective. 

Of the 5 000 former BCL employees Dixon-Warren said that less than 150 of them had not received their terminal benefits one of the reasons being that some who were temporary employees left before the companies were placed on provisional liquidation and as such they had not been able to contact them. 

The participation of creditors in the liquidation process will happen at the first and second meetings of creditors where they can submit their claims against the insolvent companies so as to receive payment due to them. 

The 2016 World Bank Doing Business report ranked the participation of creditors on the basis of resolving insolvency in Botswana at one on a scale between 0 and four. It indicates that the insolvency framework requires approval by the creditors for selection or appointment of the insolvency representative but, however, does not provide a creditor the right to request information from the insolvency representative, nor provide the right to object to decisions accepting or rejecting creditors’ claims and neither does it provide approval by creditors for sale of substantial assets of the debtor.

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