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Munyaradzi Musiiwa Midlands Correspondent
The long-standing dispute between Zimbabwe Alloys (ZimAlloys) and the Balasore Alloys Group of India is stalling the giant ferro-chrome producer from securing investment after many investors showed interests in reviving the Gweru-based smelter, The Herald can reveal.
Reports say there are investors willing to inject money into ZimAlloys after the Indian company failed honour its commitment.
ZimAlloys judicial managers Grant Thornton International terminated a US$100 million investment deal which the smelting company entered with Balasore after the Indian company failed to provide money within the stipulated time-frame.
Grant Thornton argued that they had resolved to terminate the investment deal after the investor delayed in disbursing the agreed amount within the stipulated time, which in turn slowed down the process of reviving the ferrochrome producer.
The judicial managers were suspecting that the investor might have misled ZimAlloys by claiming it had the capacity to inject US$100 million, hence the decision to terminate the agreement. Balasore challenged the decision to terminate the contract at the Supreme Court and blocked the judicial managers from looking for new investors.
The Supreme Court reserved judgement, a development which has hampered the revival of ZimAlloys despite several investors reportedly knocking on Grant Thornton’s door.
A source alleged that there was an investment of over US$100 million that is hanging in the balance as Balasore allegedly took advantage of the court processes to stall progress.
“There is an investor who is interested in ZimAlloys,” said the source.
“However, there still is a pending court case with Balasore. We suspect that Balasore could be aware and will use the court to stall investment. It is unwise to disclose the investor for fear of jeopardising the deal.”
Grant Thornton judicial manager Mr Bulilisa Mbano confirmed that the matter was still to be concluded at the courts.
He could neither deny nor confirm whether there were other investors interested in reviving ZimAlloys.
“The judgment was reserved at the court,” said Mr Mbano.
“So, at the moment, I can’t discuss anything because we are waiting for the matter to be concluded.” ZimAlloys, which used to employ over 5 000, is working on their dump which is inclusive of one commissioned in 2013 in a partnership with a Chinese firm, Jin An, in a deal worth about US$2,3 million.
Benscore, which is owned by business mogul Farai Rwodzi, acquired Zim Alloys from Anglo-American Company in 2005 before downscaling production and switching off its blast furnaces and started processing its dumps.
The company, which stopped operations in 2008, was placed under provisional judicial management on July 24, 2014.
The company was then put under final judicial management in November the same year after the ferro-chrome producer’s debt had risen to alarming levels.
Bad debt-buying company, Zimbabwe Asset Management Company, in 2016 agreed to take over US$21 million worth of the group’s non-performing loans which are sitting with a number of local financial institutions in a bid to clean the company’s balance sheet.
ZimAlloys has a total of 39,175 hectares. The company, together with Zimasco, jointly controlled about 80 percent of Zimbabwe’s chrome ore claims, mostly found along the famous Great Dyke.
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