The Sunday News
Munyaradzi Musiiwa, Midlands Correspondent
GWERU-based giant ferrochrome producer, Zimbabwe Alloys, judicial managers — Grant Thornton International — has terminated a $100 million investment deal which the chrome smelting company entered with Indian Investor, Balasore Alloys Group after the Asian company failed to honour its commitment.
In an interview, ZimAlloys judicial manager Mr Reggie Saruchera said Grant Thornton International has 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 revival of the ferrochrome producer.
Mr Saruchera said the judicial managers were suspecting that the investor might have misled Zim Alloys that it had the capacity to inject $100 million hence the decision to terminate the agreement.
“We have resolved to terminate the agreement we entered into with Indian Investor, Balasore Alloys Group after it failed to avail the money which it had promised for the revival of Zim Alloys. In total, we were expecting $100 million which the investor had promised to disburse in phases.
“We were expecting money in January but up to now we haven’t received anything. Our suspicion is that they might have misled us that they have the capacity. So we have decided to look for a new suitor,” he said.
Mr Saruchera said the matter was now before the High Court after Indian Investor, Balasore Alloys Group challenged the decision to terminate the contract.
He said the investor is also trying to block the judicial managers from looking for new investors.
“I cannot give you much detail pertaining to that because the case is now before the High Court. The investor is seeking to obstruct us from looking for new investors,” he said.
Mr Saruchera said Zim Alloys, however, is slowly awakening as it has devised a turnaround strategy which will see a self reincarnation of the company.
Zim Alloys is working on its dump which is inclusive of one commissioned in 2013 in a partnership with a Chinese firm, JinAn in a deal worth about $2,3 million.
Benscore, which owned by business mogul Farai Rwodzi, acquired ZimAlloys from Anglo-American Company in 2005 before downscaling production and switching off its blast furnaces and started processing its dumps.
The former Anglo American Plc 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 in 2016 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.
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 Great Dyke.