BNC in cash-flow crisis

Shakeman Mugari

BINDURA Nickel Corporation has been forced to postpone payment of a dividend owing to a serious cash-flow crisis caused by the current exchange rate regime.



e=”Verdana, Arial, Helvetica, sans-serif”>The mining firm is understood to be battling to remain afloat due to cash-flow problems caused by exchange rate regulations, inflation and import duty tariffs.


Import duty tariffs are reported to have increased the company’s operational costs, which sources say are now hampering production.


Bindura is also battling to service debts that are not covered under the productive sector facility (PSF), set up by the Reserve Bank of Zimbabwe earlier this year.


The mining firm has also failed to pay its $150 dividend owing to its parlous financial position.


Officials at Bindura’s share transfer secretaries, First Transfer Secretaries (FTS), this week confirmed that the company had failed to pay out a dividend to shareholders.


The company is understood to have informed the transfer secretaries of their failure to pay the dividend citing insufficient funds.


Institutional and small shareholders have not received their dividend.

The payment date for the dividend was June 15.


Uncertainty over the dividend could see Bindura shares tumbling on the stock exchange where they are currently trading at an average of $1 000 a share.


Acting chief executive officer Joe Schwarz confirmed that the mine was facing cash-flow problems. He said the board of directors had deferred the dividend payment.


“Yes we are facing cash-flow problems and this is because of the economic environment,” said Schwarz this week.


“Inflation, the economic environment and the forex exchange regime have caused our problems. The import duty has also added to our problems.”

Schwarz said the company had been forced to postpone payment of the dividend because of the poor economic situation.