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Business Reporter
AN unnamed Indian investor will snap up a 70 percent stake in Zimbabwe’s second largest ferro-chrome producer Zim-Alloys after judicial manager Reggie Saruchera sealed a deal for a $90 million investment.
The Herald Business has gathered that a team from Grant Thornton is already in the United Kingdom to finalise intricate details of the deal. Mr Saruchera could not be reached for comment, but sources said an agreement had been reached with the investor and was being finalised.
“A team from Grant Thornton is in London to finalise the intricate details of the deal and they have finally settled on $90 million, which will see the investor taking up a 70 percent stake in the company. The deal will see the holding of former major shareholder Farai Rwodzi being diluted.
“The deal was delayed due to discussions around the valuation of the company. Once the investor pays, part of the money will go towards creditors while the remainder will cater for working capital needs.”
Zim-Alloys, which was sold to the Farai Rwodzi-led Benscore Consortium for $10 million in 2005 failed to take off due to poor production performance, attributed to the closure of its four furnaces, as well as poor global metal prices and rising operational costs.
The ferrochrome producer, formerly owned by Anglo American Plc, ceased operations in 2008 and was placed under provisional judicial management on July 24, 2014.
The company was put under final judicial management in November the same year after the ferrochrome producer’s debt had risen to alarming levels.
Zim-Alloys has debts estimated at around $60 million. ZAMCO, which assumed over half a billion dollars non-performing loans on the books of local banks and owed by various firms, took over $21 million worth of bad loans extended to Zim-Alloys.
Meanwhile, the ferro-chrome processor is exploring various means to rebuild capacity to beneficiate instead of exporting chrome ore, in line with Government policy.
Efforts have been made towards the upgrade of the firm’s Lalapanzi plant near Gweru, a move expected to increase production to 7 000 tonnes a month. Zim-Alloys is also looking at the possibility of upgrading its heavy media separation plant at Sutton Mine in Mutorashanga.
Zim-Alloys ceded 50 percent of its ferrochrome reserves to Government, as directed by Government last year, which also affected Zimasco; Zimbabwe’s largest ferro-chrome processing company. Zim-Alloys owned 32 000 hectares in chrome ore rich ground.
Online Reporter