What is the significance of the 7 February 2017?
The 7 February 2017 (or return date) is when the High Court will decide if the companies should be placed in final liquidation. The order granted on 9 October 2016 to wind up the companies was only a provisional liquidation order or rule nisi. Per the court order any interested party may apply to the court to not grant the order finally winding up the companies. The court can decide to extend the provisional liquidation period and delay the final winding up order if it believes it necessary.
Do you expect the final liquidation to go ahead?
In order for the final liquidation order not to be granted i.e. the provisional liquidation order is discharged, it would need to be demonstrated to the satisfaction of the court that the companies were not insolvent (or that the winding up petition should be dismissed). Based on my assessment all three companies are fatally insolvent. Therefore, in my view, it is in the best interests of all of the creditors that the companies be finally wound up and the liquidation process followed to its conclusion.
Does the liquidation end on 7 February 2017?
No, it is not it is the end of the provisional liquidation period. After the 7 February 2017 the formal liquidation process commences. The winding up process includes holding meetings of creditors and the sale of assets.
Will operations restart in the next few months?
There is no intention to restart operations in the next few months, either after 7 February 2017 or after the first meeting of creditors as the companies are insolvent and there are no resources available to finance operations.
What is happening at the mines?
The mines are currently on care and maintenance. The main objective of care and maintenance is to maintain and safeguard the assets. This includes keeping the mines free from water which accumulates underground as a result of normal operations.
What is the level of interest from third parties to buy the assets?
There has been interest in the assets of the three companies from a number of parties. The interest has been in some or all of the assets and has been from local and overseas parties. I have met with a number of parties and corresponded with others.
However the expressed interest has not led to any formal offers.
Do the interested buyers have to submit their offers by the 7 February 2017?
No, they do not. The 7 February 2017 is the date the companies, subject to the confirmation of the High Court, will be placed in final liquidation.
Although an offer can be submitted by an interested buyer at any time ordinarily the assets cannot be sold prior to the second meeting of creditors.
Any offer, in advance of the second meeting, would only be considered if it was in the best interests of the creditors.
When do interested buyers have to submit their offers by?
Once the companies are in final liquidation the meeting of creditors can be held. By law there has to be two meetings of creditors. After the first meeting of creditors the sale process will commence but the conclusion of any sale will only be after the second meeting of creditors.
What is a meeting of creditors?
A meeting of creditors is a formal meeting convened by the Master of the High Court, who oversees the liquidation process. The meetings are held so that the creditors can prove their claims against the companies (i.e. have themselves recognised as creditors in the liquidation) so that they can issue instructions to the liquidator and ultimately receive payment against their claim (a dividend) at the end of the liquidation process if there are sufficient funds realized in the sale of assets to cover the costs of the liquidation and pay a dividend to creditors.
The erstwhile directors of the companies are required to attend the two meetings of creditors so that they can answer questions by creditors and the liquidator.
What happens at the first meeting of creditors?
At the first meeting of creditors the creditors have an opportunity to prove their claim.
The proven creditors also nominate the final liquidator. This does not have to be the same person as the provisional liquidator (who was appointed by the court) although it normally is but it is for the creditors to decide.
The provisional liquidator also presents a report written in terms of the section 448 of the Companies Act. This report provides creditors with the details of the assets and liabilities of the companies as well as providing the reasons why the companies failed among other matters.
When will the first meeting of creditors take place?
If the companies are placed in final liquidation on 7 February 2016 the expected date for the first meeting of creditors is expected to be held in April 2017.
The date for the meeting is not set by the provisional liquidator but by the Master of the High Court.
The provisional liquidator has to prepare a report and submit claim forms to all known creditors. The number of creditors for these companies are considerable and I will need sufficient time after the return date to do this.
When will the second meeting of creditors take place and what happens at that meeting?
There is no set time after the first meeting that the second meeting of creditors needs to take place. Ordinarily it happens between three to six months after the first but it depends on the particular liquidation.
The second meeting allows creditors a further opportunity to prove their claims.
The final liquidator will report at that meeting on the affairs of the estate and will seek direction
What is the state of security at the mines?
There have been some incidents of theft and intrusion at the mines but thankfully these have been relatively minor and over the Christmas period no more significant than last year. There has not been significant dissipation of assets despite what is being reported in the press.
There is 24 hour security at both Tati and BCL sites.
I have had a reported incident of someone telephoning local companies claiming the assets of BCL are to be auctioned and requested payment of a deposit. Members of the public should be aware of these scams. Any intention to dispose of the assets will be formally communicated and advertised.
What is the status of the Norilsk matter?
Prior to liquidation BCL Investments and BCL entered into a share purchase agreement with Norlisk Nickel Mauritius and Norlisk Nickel International Holdings Limited to acquire Norlisk’s interest in the Nkomati mine in South Africa. Prior to liquidation, there was a dispute between the parties to the agreement as to whether the conditions precedent were met and therefore whether the contract has full force and effect.
Since the date of liquidation, Norilsk has taken legal action against the provisional liquidator in the High Court of Botswana for enforcement of their alleged rights under the share purchase agreement.
As the matter is before the courts no further comment can or will be made.
Have all the employees been paid their terminal benefits?
The vast majority of the terminated employees were paid their terminal benefit before Christmas.
There are some (approximately 180) that have not been paid but these are mainly those that did not attend their consultation to agree and sign off their terminal benefits. Many of these employees were those who left BCL before the liquidation, but had not been paid their terminal benefits. We encourage all individuals who have not yet come forward to finalize their terminal benefits payments to do so.
Are the terminated employees still allowed to occupy the houses?
Those terminated employees who were living in company owned houses at the date of liquidation have been allowed to remain in the houses. The majority of leases have been signed up to 31 October 2017. The terminated employees will be charged no rental but will be required to pay for their own water and electricity. I will be checking to make sure that the tenant is a former employee and they are occupying the premises full time. They are also required to maintain the premises - in a suitable state.
How else are you helping the former employees?
Unfortunately, with the liquidation process there is nothing further that I can do to assist the employees now that I have paid their terminal benefits, and provided them with letters of service and letters to third party creditors.
Should the Government decide to fund support services or additional direct support for former employees and if it believes I am in the best position to administer this service/support as provisional liquidator then I have indicated that I am prepared to assist providing my costs are covered so that the creditors are nor prejudiced.