Mining and exploration group ASA Resources Group will hold onto its Zimbabwean subsidiary, Bindura Nickel Corporation for longer after negotiations with an unidentified United Kingdom have been stopped.
ASA is currently under administration after falling short of good corporate governance.
“Shareholders are advised that discussions regarding the proposed acquisition of the interest of ASA in BNC by the Third Party have been terminated,” read part of a notice by the group.
“Shareholders are referred to the cautionary statements published on 19 December 2018, 18 January and 15 February 2019 respectively, advising that the ultimate holding company of BNC, ASA, had entered into a Sale and Purchase Agreement (“SPA”) with a third party in relation to the 74,73 percent shareholding in BNC.
“The conditions of the SPA included various regulatory approvals and other conditions as expected with a transaction of this nature. The Third Party is a UK-based nickel company with complementary interests in Southern Africa.
Earlier indications were that a UK-based mining firm was eyeing to acquire a controlling stake in the local nickel producer.
“Bindura Nickel Corporation is advising that the ultimate holding company of BNC, ASA Resource Group Plc, has entered into a Sale and Purchase Agreement (SPA) with a third party in relation to the 74.73% shareholding in BNC. The third party is a UK based nickel company with complimentary interests in Southern Africa,” BNC had announced last year.
The latest termination in talks is the second such after ASA had been in talks with London and Johannesburg-listed Pan African Resources, which eventually failed to materialize.
Pan African Resources had come into the mix with an announcement early last year that it was in “exclusive talks with the joint administrators of ASA Resource Group” in relation to acquiring “certain of the assets and liabilities of ASA.”
But the mining firm then decided to terminate those negotiations.
“Shareholders are hereby notified that discussions between the company and ASA relating to the acquisition have been terminated and, accordingly, shareholders are no longer required to exercise caution when dealing in Pan African shares,” said PANAF in a statement to the JSE.
The latest pullout could mean that RichPro’s non-binding offer to ASA Resource Group – which it made late last year – is the only one left on the table for the struggling mining group.
It also means that there will likely be a change of guard on the ASA board and management after RichPro made clear its intentions.
RichPro is owned by Chinese industrialist Feng Hailiang.
The major concern within the current ASA board is that former ASA chairman and chief executive Yat Hoi Ning, who was ousted in 2017, is allegedly linked to RichPro.
Ning was sacked from ASA in April 2017 following allegations of fraud, of figures ranging between $4 million and $15 million related to gold producer Freda-Rebecca.
Also sacked was BNC chairman Yim Kwan and Freda Rebecca financial controller Roy Shum.
The ASA Resource group has been struggling to pay creditors when debts fall due, indicative of problems lying deeper than the on-going shareholder spats.
Ning was appointed executive chairman of ASA Resources mid-2015 after the following the rancorous removal of founder and then CEO of Mwana Africa, Kalaa Mpinga.
ASA’s assets in Zimbabwe include Bindura Nickel Corporation, Freda Rebecca Gold Mine and an agribusiness venture. It also has copper and diamond operations in Congo and South Africa, respectively, as well another nickel mine in Botswana and a base metal exploration in the Democratic Republic of Congo (DRC).