Repayment plan halts Zisco progress Minister Bimha
Minister Bimha

Minister Bimha

Senior Business Reporter
INDUSTRY and Commerce minister, Cde Mike Bimha, yesterday said delay in the resumption of operations at New Zim-Steel, formerly Ziscosteel, in Redcliff, was due to outstanding issues between the investor and creditors over the company’s debt repayment plan.
The Government and an Indian conglomerate, Essar Holdings, signed a US$750 million deal to revive the former iron and steel giant in 2011.

Part of the conditions of the deal required the new investor to settle a debt amounting to US$300 million and US$200 million owed to foreign and local creditors respectively.

Minister Bimha told Business Chronicle in Bulawayo yesterday that outstanding issues had nothing to do with policy anymore.

“There have also been engagements between the investor and creditors so that they come up with their own agreed ways of repayment.

“We’re meeting Essar officials next week to see how best we can speed up the process,” he said.

The minister said progress on the Essar deal was now a question of implementation.

“The Government has given its support. The investor is willing and committed to continue. What we need to do is to speed up the implementation process.

“On further analysis of the plant, it has been discovered that a lot has been happening in those years when the plant was idle.

“There has been a lot of sabotage, a lot of erosion and there has been decay to a point where 65 percent of the plant has to be reconstructed.

So it’s more like building a new Zisco,” added Bimha, pointing out that this was also a factor leading to delays in resumption of operations at New ZimSteel.

During the inclusive Government, the Essar deal was stalled by bickering that existed between political parties.

The Redcliff steel manufacturing firm suspended operations in 2008 at the height of economic meltdown. It is hoped that operationalisation of New ZimSteel will ease the liquidity situation in the country through exports as well as supporting downstream industries, which at present are closed owing to operational constraints.

At its peak, Zisco employed more than 4 000 workers producing about 750 000 tonnes of steel annually.

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