THE Zimbabwe Diamond Consolidated Company (ZCDC) has made moves to acquire Limpopo Mining Resources also known as River Ranch Mine, previously linked to the late army general Solomon Mujuru, for a paltry US$4 million, but faces resistance from Rani Investments which has filed a High Court application describing the offer as “too ridiculous to even consider”, court papers have shown.
Rani Investments the majority shareholder of Limpopo Mining Resources Private Limited with a shareholding of 80% this week filed a High Court application requesting for the removal of the company from liquidation.
The other 20% shareholding is held by Khupukile Resources Private Limited, a company owned by Mujuru who died in an inferno after the house in which he was sleeping was allegedly gutted by fire under mysterious circumstances at his Beatrice farm outside Harare on August 15, 2011.
ZCDC wants to acquire Limpopo Mining Resources through real time gross settlements(RTGS) but the move has been rejected by Rani Investments which described it as “ridiculous” as it only constitutes about 4,8% of the debt owed to the creditors.
According to the liquidator in a letter dated March 7 2018, the extent of Limpopo Mineral Resources debts amount to US$21,4 million and Rani Investments being the major shareholder is the major creditor with US$21 million.
Through the company’s operations director Karl Snater, Rani Investments wants the setting aside of the order placing Limpopo Mining Resources under liquidation in terms of the provisions of Section 227 of the Companies Act (Chapter 24:03).
Limpopo Mineral Resources was placed under liquidation by the High Court (HC7398/2012) in 2012 after the company approached the courts on a voluntary basis for an order to be placed under liquidation due to some operational challenges.
The company requested to be placed under liquidation after it became insolvent. A provisional order for the liquidation of Limpopo Mining Resources was then granted by the High Court on July 18 2012 and was confirmed on September 12 2012.
“The first respondent (liquidator) has received an offer from the Zimbabwe Consolidated Diamond Company for the purchase of the company and its assets in the sum of US$4 million. Applicant wishes to revive the operations in Limpopo Mineral resources, enter into a compromise with its residual creditors and convert part of the debt it is owed into equity and part of it into a long term loan. It is on this basis aforesaid that the applicant has approached this honourable court for relief as set out in the draft order,” reads Snater’s application.
He also said the liquidation of Limpopo Mineral Resources has not yielded any positive results as no meaningful progress has been made since 2012 when the company was placed under liquidation.
“Applicant which is Limpopo Mineral Resource’s major shareholder and creditor has demonstrated its good faith in resuscitating the latter by offering to fund the company such that it pays off all the other minority creditors and the statutory fees due to the first and second respondents (liquidator and Master of High Court),” reads the application.
“Applicant will also convert part of the debt owed to it into equity and part of it into a long term loan. It will then inject the necessary capital in the form of a loan to kick off operations . . . The offer as per annexure E (by ZCDC) is too ridiculous to be entertained as it constitutes only about 4,8% of the debt owed to the creditors. The offer is too ridiculous to even consider.”
Meanwhile ZCDC chief executive officer, Morris Mpofu confirmed in an interview this week his company had approached River Ranch liquidator, Winsley Militala with an offer to purchase the mine.
“As you know, the mine (River Ranch) has been under liquidation as granted by the High Court for some years now. So we did reach out to the liquidator (Winsley Militala) with an offer to purchase the mine and re-open it,” said Mpofu.
“The liquidator is yet to get back to us on our offer. I cannot divulge details of the offer at this moment. It will be up to the liquidator, probably at the opportune moment, to lift the lid on the price tag.”
ZCDC is a diamond mining company wholly owned by the government. It was formed following the unilateral March 2015 government decision to shut all diamond mining companies and consolidate them under the company.
Source: Zim Standard