Banro starts court-approved sales, investment solicitation process

JOHANNESBURG (miningweekly.com) – Following the start of restructuring proceedings last month, Democratic Republic of Congo- (DRC-) focused miner Banro Corporation and its Barbados subsidiaries have initiated a sale and investment solicitation process (Sisp).

The company, which in December filed for bankruptcy protection in Canada under the Companies' Creditors Arrangement Act (CCAA), operates the Namoya and Twangiza gold mines in the DRC.

The Sisp will be conducted in conjunction with the CCAA proceedings.

FTI Consulting Canada has been appointed as monitor of the companies for the proceedings and will assist the companies in conducting the Sisp.

Banro on Monday noted that it and the monitor, through its affiliate FTI Capital Advisors, are seeking parties interested in acquiring or investing in the business or the assets of the company in a manner that is determined to be a superior offer to the recapitalisation plan under the CCAA process.

Interested parties will be given an opportunity to submit offers to acquire some or all of the business and assets of the company and its subsidiaries for cash proceeds equal to the outstanding amount of the debtor-in-possession facility, the priority debt, 75% of the affected parity lien debt of Banro, as well as a cash consideration sufficient to repay all amounts due under the stream agreements or treatment of the stream agreements, on the same terms as the recapitalisation plan.

Offers for the acquisition could also be on other terms determined to be superior to the recapitalisation plan.

Under the Sisp, potential buyers will be provided a confidential information memorandum and access to a virtual data room on execution of a nondisclosure agreement that is acceptable to Banro and the monitor. 

The deadline for the submission of nonbinding letters of intent is March 2, and the deadline for the submission of binding bids is April 9.

Banro has had a dismal year in the DRC, as political instability and insurgent violence have resulted in employees being killed at the Twangiza gold mine, in eastern DRC, while it recently suspended operations at its Namoya mine, owing to an ongoing illegal road blockade.

However, mining operations at Namoya had restarted earlier this month, as a result of the re-establishment of the road access to the mine. Operations at Twangiza continue.

The Canadian gold miner last month also received notice from the TSX and the NYSE American exchanges that its trade-suspended equities would be delisted this year.

Banro’s two gold mines produced a combined 45 197 oz of gold during the fourth quarter of 2017, taking gold production for the full year to 178 980 oz.