Govt pays P1bn BCL loan to Barclays

Dikarabo Ramadubu - BG reporter
Tuesday, 17 January 2017
Govt pays P1bn BCL loan to Barclays

Government took a bold move and cleared the P1billion loan owed to Barclays Bank of Botswana, which was the principal amount given as a bailout to the BCL mine when it was on the verge of collapse in April 2016.

Botswana Guardian investigations have turned up evidence that, it was legally binding for government to pay because the cash-strapped BCL mine ceased operations through a voluntary liquidation initiated by the shareholders.The decision to settle is a demonstration to international creditors and credit rating agencies that the government of Botswana will always pay her obligation if called to do so. The loan was paid off during the festive season between December 28 and 31, 2016.

Financial experts and observers who spoke on condition of anonimity explained that the development means that government has paid for only the facility that was guaranteed, unfortunately other bank facilities that were negotiated by BCL during its normal course of operations will have to follow the stipulated process of claims via the liquidator.BCL borrowed the money in April 2016 in order to settle debts with its creditors as some were no longer willing to supply them with the much-needed material. The facility was to mature in a year’s time, a matter which meant  BCL was supposed to  start paying the principal amount owed  from March 2017.

Botswana Guardian has it in good authority that subsequent to putting  the mine under  provisional  liquidation, government as the mine owner and  guarantor took over the debts and paid interest until in December where they settled the principal amount of P1billion, Secretary for Development Budget in the Ministry of Finance and Economic Development, Cornelius Dekop confirmed that indeed government in its capacity as the mine owner and guarantor has paid the facility that the bank advanced to the BCL mine.

Dekop said: “We settled the principal amount in full at the end of December 2016. Originally we have been contractually obligated to pay interest as BCL failed to do so before they were put in provisional liquidation,” said Dekop. Barclays Bank executives were cagey in their response as they could not deny or confirm, citing apprehension with violating confidentiality terms. Head of Marketing and Corporate Relations, Duduetsang Chappelle- Molloy said: “this is sensitive and customer confidential information that we are not in a position to share. However, please note that all the corporate exposures to the BCL Group are fully secured and or guaranteed.”

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