Investment firm courts global equity fund

in the mining firm. 
The new fund is likely to get a controlling stake in the company through private placement.
RioZim managing director Mr Josh Sachikonye said recently that the company intended to raise US$47 million through a combination of a rights offer and private placement. Of the US$47 million, US$35 million would be raised through private placement.
“Rain Tree and Global Emerging Markets are in the process of setting up a fund to be based in Mauritius and will invest in RioZim. Initially, Rain Tree had courted some Ukrainians and Russians but they later raised some concerns, for reasons best known to them,” said a source close to the developments.
GEM is a US$3,4 billion alternative investment group that manages a diverse set of investment vehicles focused on emerging markets.
The partners have a century of collective experience and as a group has invested in 265 companies across 55 countries worldwide.
GEM’s investment vehicles provide the group and its investors with a diversified portfolio of asset classes that span the global private investing spectrum. GEM enjoys exposure to the United States private equity space with its affiliate fund, Kinderhook Industries, dedicated to mid-cap control buyouts in the US.
GEM partners founded Kinderhook in 2001 and GEM remains both an LP & GP in the fund.
Mr Sachikonye said yesterday that “significant progress has been made on raising funds to retire debt and recapitalise our operations”.
RioZim owes a number of banks about US$59 million and some of the institutions have made an application for a judicial management order.
Last year, an Extraordinary General Meeting was convened to consider a US$59 million rights offer and also present to shareholders with a proposed debt retirement strategy. But 47 percent of the shareholders rejected the proposal while 32 percent voted in favour of the capital raise initiative.
On the debt equity swap, 31 percent of shareholders endorsed the proposal, which was rejected by 46 percent of the other shareholders. Of the US$59 million RioZim wanted to raise, US$29 million was meant to clear debts, US$11,6 million for working capital, US$13,6 million for capital projects, while US$13 million would be directed towards recapitalisation.
About US$13,96 million had been earmarked for Renco, US$4,22 million for Empress Nickel Refinery and US$4,87 million for Cam & Motor Mine.
Meanwhile, Mr Sachikonye has dismissed the speculation that he is due to step down.
“I do not have any intention to quit,” said Mr Sachikonye.