Munyaradzi Musiiwa, Midlands Bureau
GWERU based giant ferrochrome producer, Zimbabwe Alloys, which is under judicial management, will this week meet its creditors after securing a $100 million investment deal with Indian Investor, Balasore Alloys Group.
Balasore Alloys Group, formerly Ispat Alloys Limited, is part of the renowned Ispat group of companies, a major business house in India, promoted by the Mittals. In an interview, Zim Alloys judicial manager Mr Reggie Saruchera of Grant Thornton International said the company was going for a scheme of arrangement on Wednesday with its creditors where they will avail the new investor. A scheme of arrangement is a court-approved agreement between a company and its shareholders or creditors.
It may affect mergers and amalgamations and may alter shareholder or creditor rights. Mr Saruchera said the new investor will be unveiled to the creditors during the meeting where they will also deliberate on a scheme of arrangement.
He said once approved, the scheme of arrangement will pave way for the operationalisation of Zim Alloys which will see the rebuilding of blast furnaces and construction of other washing and smelting plants.
“We are convening a meeting with Zim Alloys creditors to discuss a scheme of arrangement. As you are aware we have a new investor from India who is expected to bring a $100 million. This investor will also be introduced to the creditors during the same meeting,” he said.
Mr Saruchera said the company will re-engage its former employees.
“The company will re-engage its former employees and will also employ more people as it grows and increases production,” he said.
The company is working at its dumps which is inclusive of the one commissioned in 2013 in a partnership with a Chinese firm, JinAn in a deal worth about $2, 3 million.
Benscore, which is owned by business mogul Mr 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 former Anglo American ferrochrome producer which stopped operations in 2008 was placed under provisional judicial management in July 2014. The company was then put under final judicial management in November the same year after the ferrochrome producer’s debt had risen to alarming levels.
However, bad debt-buying company, Zimbabwe Asset Management Company (Zamco) last year agreed to take over $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.
Zim Alloys 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 Great Dyke. The revival of one of the country’s biggest ferrochrome producer Zim Alloys has rekindled hope for the city of Gweru.