THE liquidator of Limpopo Mining Resources, also known as River Ranch Mine, previously linked to the late army general Solomon Mujuru, has opposed an application by the mine’s majority owners, Rani Investments, to have the company removed from liquidation.
In the application, Rani Investments also shot down proposals by the Zimbabwe Consolidated Diamond Company (ZCDC) to acquire the mine for a “ridiculous” US$4 million.
By Wongai Zhangazha
In opposing papers filed last week at the High Court, the Liquidator, Winsley Evans Militala, who described Rani Investment application as “premature”, said there was no satisfactory reason as to why the liquidation of Limpopo Mining Resources must be set aside.
Rani Investments, the majority shareholder of Limpopo Mining Resources Private Limited with an 80% stake, last month filed a High Court application requesting 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.
The company is resisting an offer by the ZCDC which wants to acquire Limpopo Mining Resources for US$4 million through real time gross settlements (RTGS). In its application, Rani Investments described the ZCDC offer as “too ridiculous to even consider” as it only constitutes about 4,8% of the debt owed to the creditors. Limpopo was placed under voluntary liquidation in 2012.
According to the liquidator in a letter dated March 7, 2018, Limpopo Mineral Resources total debts amount 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).
Snater said Rani Investments will inject enough money to pay off its creditors and the statutory fees for it to be removed from liquidation.
Rani Investments said it would 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.
However, Militala, opposing the application, argued that there are no details of the compromise being alluded to by Rani Investments. “The Application being sought cannot succeed. Applicant need to satisfy the Court that all proceedings in relation to the winding up ought to be set aside. In this case there is no satisfactory reason why this liquidation must be set aside,” states the liquidator.
“. . . The compromise must be entered into or discussed before an application of this nature is made. Section 191 of the Companies Act provides for this compromise. There is no compromise that is there for the creditors, master and liquidator to consider. This application ought to have a detailed compromise or agreement for the court to consider. A compromise cannot be made or agreed to after the company has been taken out of liquidation as this does not protect the creditors. This application is only meant to frustrate the powers of the liquidator in terms of Section 221 of the Companies Act. The liquidator has received an offer to have the assets of the company sold to Zimbabwe Consolidated Diamond Company.”
Militala said the High Court should take note that Limpopo Mining Resources was not yet able to pay its liabilities, cannot continue to trade as a going concern and that it is not able to operate its business.
He said Limpopo Resources Limited had to prove that there are satisfactory reasons to set aside the liquidation process. “In casu there are no satisfactory reasons for the company to be taken out of liquidation. This is so for the following reasons: there is no scheme or arrangement to take care of the interest of the creditors; there is no acceptable scheme to secure payment of Master’s fees and liquidator’s fees; the mining claims are no longer in the name of the company as the claims certificates expired and some have since been reissued to a government arm called Mining Promotion Company,” Militala said.
“The special grant that was in favour of the company expired and has not been renewed, the assets of the company only outstanding are the existing buildings, machinery and equipment and in the absence of the renewed special grant and claim certificates, there is no operations that can be resuscitated by the Applicant.”
The liquidator said there have been no serious purchasers of the assets of the company. He said several buyers came but none of them showed interest.
Militala said there was an offer for US$4 million for the remaining assets which he said was reasonable.
“Applicant has not presented a counter offer above the offered US$4 million or shown the liquidator a buyer who is prepared to pay above the offered amount.