admin
Africa Moyo —
FERROCHROME producer, ZimAlloys, is still saddled with its US$60 million debt as attempts to offload US$21 million of the debt to the Zimbabwe Asset Management Company (Zamco) have hit turbulence.
Zamco, a special purpose vehicle created by the Reserve Bank of Zimbabwe in 2014 as part of holistic measures to deal with the scourge of rising NPLs in the banking sector, had reportedly thrashed a deal with ZimAlloys to acquire US$21 million worth of its NPLs sitting with a number of local financial institutions.
The move was designed to be part of measures to clean ZimAlloys’ balance sheet and make it attractive to suitors who badly are wanted to revive the firm’s fortunes. ZimAlloys, which is currently under judicial management since 2014, is only doing metal recovery due to the absence of a cash rich investor.
Metal recovery is a process done by metal recovery plants where the entrapped slag (ferrochrome) from the slag generated during the production of ferro chrome and charge chrome would be recovered.
Mr Reggie Saruchera of Grant Thornton Zimbabwe is the judicial manager. Contacted for comment last week, a Zamco official Mr Edson Shangu could not be drawn into revealing if the deal was still on.
“With respect to the proposed acquisition of ZimAlloys’ NPLs, we suggest you contact the company’s judicial manager, Mr Reggie Saruchera of Grant Thornton . . .” said Mr Shangu. Mr Saruchera was unreachable but an advisory manager at Grant Thornton, Mr Bulisa Mbano, told The Sunday Mail Business that the plan remains in the pipeline but Zamco wants ZimAlloys to restart at least one furnace before committing to acquiring the US$21 million worth of NPLs.
“The takeover of US$21 million by Zamco has been approved but (it is) subject to us restarting at least one furnace.
“Once we restart one of the furnaces, we then do a scheme of arrangement,” said Mr Mbano.
Since the debt issue is still to be empirically resolved, a new investor is yet to be tied down although negotiations are reportedly taking place underground. But Mr Mbano said despite the absence of an investor, they are pressing ahead with measures to restart some of the furnaces.
“We haven’t found an investor for ZimAlloys; there are one or two issues (outstanding) but we are currently trying to sort out some structures to restart some furnaces.
“But I can tell you that (in the) first quarter of 2017, we will have good news from ZimAlloys (and) Zimbabwe would be taking off,” said Mr Mbano.
The ferrochrome producer has four furnaces and early this year, it was in the market looking for US$5,5 million to revive its bigger furnace.
ZimAlloys is also reportedly focusing on upgrading the Lalapanzi plant near Gweru so as to increase production to 7000 tonnes per month.
It is also considering upgrading its heavy metal separation plant at Sutton Mine in Mutorashanga. Bought from Anglo-platinum by a local consortium in 20015, ZimAlloys is one of the major ferrochrome producers together with Zimasco.
Government says the country has one billion tonnes of chrome underground and Zimasco and ZimAlloys hold claims with a combined 750 million tonnes of the chrome.
There are moves to have the miners relinquish part of the claims and remain with half of what they have so as to “equitably empower everybody” who wants to mine.
Online Reporter