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Mwana Africa (LON:MWA) subsidiary Bindura Nickel has arranged a US$20 mln bond to finance the re-start its smelter in Zimbabwe.
Mwana, which owns 74.73% of Bindura, said the net proceeds will buy new equipment for the plant, which should re-open in around nine months.
Kalaa Mpinga, Mwana’s chief executive, said he was delighted with the new finance, which he said underlined the confidence Zimbabwean financial institutions have in the prospects for BNC.
“This is the first corporate bond to be issued for a mining company with both Prescribed and Liquid Asset status, and we shall endeavour to deliver on the stated 12-month accelerated smelter restart plan."
Zimbabwe funds must invest a minimum percentage of their funds under management into prescribed assets.
Mpinga had said previously that the new smelter will save the company between US$10mln-US$15mln annually for an upfront cost of US$26mln.
The bond issue follows a general meeting requisition call yesterday by a group of shareholders, led by investor Ian Dearing, who wish to replace some of the non-executives.
Mwana said neither major shareholder China International Mining Group (CIMGC) nor Yat Hoi Ning (CIMGC’s chairman) were behind the request.
In December, however, CIMGC and Mr Ning took legal action against the re-appointment of Stuart Morris as Mwana's chairman and the appointments of Ngoni Kudenga and Herbert Mashanyare as non-executives.
At the time, Mwana said it had attempted to reach a compromise over the dispute with CIMGC but would defend its position in court if necessary.
The shares of CIMGC and associates were not counted when the vote on Resolution 3 (appointment of Stuart Morris) was taken at the AGM as Mwana said they infringed a Relationship Agreement between the two groups.
CIMGC directly and indirectly has a near 30% stake in the nickel and gold miner.