The Banro Twangiza gold mine in eastern DRC. Photo: Philip Mostert
Dual-listed gold producer Banro Corporation, weighed down by significant ongoing operational and financial challenges, might be compelled to reconsider its presence in the Democratic of Congo.
The latest in a list of the company’s woes is the continued suspension of mining operations at Namoya mine in Maniema province of the Democratic Republic of the Congo (DRC), which has been dormant since 25 September due due to political instability.
To sustain its business operations in the DRC, among other other interventions, Banro needs to secure funding for operations and to meet upcoming debt servicing and working capital requirements. Failure to meet these requirements, the company will be unable to meet its non-DRC financial obligations as they become due.
In light of this, a special committee comprised of the company’s independent directors has been charged with financing and other strategic options (including the restructuring or refinancing of existing obligations).
The committe is of the view that it might not be able to raise the sufficient funds to refinance Banro’s existing indebtedness and to address its working capital requirements. In effect, this has raised substantial doubts about the company’s ability to continue as a going concern.
Meanwhile, the discussions between the committee and Banro’s major stakeholders concerning the possible restructuring of the company’s non-DRC debt obligations, as well as the provision of financing to support the company’s ongoing operations in the DRC, are underway.