GOVERNMENT ASSUMES EQUITY STAKE IN MINERGY TO PREVENT INSOLVENCY AS DEBT AND LOSSES MOUNT.

Article By: Gilbert Manenye

The government has announced plans to bail out Minergy Limited, the troubled coal miner behind the Masama project, by converting more than P700 million in public debt into equity. The rescue plan comes as Minergy continues to struggle with cash flow challenges and a high debt burden, now over P1.3 billion.

The debt-to-equity swap, confirmed by the Minister of Minerals and Energy, Bogolo Kenewendo, follows years of quasi - debt funding from the Minerals Development Company Botswana and Botswana Development Corporation, which together have exceeded P716 million to the company since 2019.

The state's conversion of its debt into equity is aimed at cleaning up Minergy's balance sheet as the company embarks on a 6 - month capital raising drive to avoid insolvency.