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The deal could result in a US$355 million capital injection to revive the steel giant.
While Essar Energy would acquire 51 percent, the State intends to sell an additional 9 percent to bring the total stake that it is offloading to 60 percent.
It was not immediately clear who would acquire the other 9 percent, but reports point to a consortium led by Renaissance chief Executive Patterson Timba and Econet Wireless founder Mr Strive Masiyiwa.

Essar Energy beat Indian steel giant Jindhal Steel and Power, Sino-Zimbabwe and Sovereign Capital — a consortium of indigenous and South African investors.
The revival of Zisco was paramount both in view of its critical role to leveraging economic recovery, industrial development and creation of employment.
Industry and Commerce Minister Welshman Ncube could neither deny nor confirm the development saying he was awaiting communication from his principals.

“I am still waiting to get communication from the principals over the winner,” he said.

Herald Business, however, understands that Minister Ncube has settled for the Mauritius petroleum giant with two of the principals having already approved it.
Sources said Essar would settle Zisco’s US$240 million debt to German creditor KFW, renew blast furnace 4 and replace coke oven batteries. The Mauritian firm operates a number of subsidiaries involved in exploration, production, refining and retailing petroleum and consumable products.

Essar Energy is part of Essar Global Limited-a multinational group domiciled in India. Essar Energy has US$10 billion assets and is planning a listing in London.
Its massive financial muscle could restore Zisco’s position among the leading steel manufacturing firms in Africa.
Zisco has installed capacity of 1 million tonnes of steel annually and at its peak the dormant steel manufacturing giant employed about 4 000 workers. Presently, at least 1 000 were said to be still on the steel maker’s payroll.

The revival of Zisco by Essar Energy would be a monumental victory for job creation and economic recovery efforts as similar attempts failed after a US$400 million deal with India’s Global Steel Holdings collapsed in 2004.

Essar’s success may close an intriguing chapter of a series of efforts aimed at reviving Zisco after two investors short-listed for the acquisition of Zisco earlier this year were rejected by the Presidency on grounds they would not serve national interests.

The Kwekwe based steel maker, which is presently not operational has been surviving on selling scrap metal that had accumulated over 40 years. However, the revival of Zisco cannot be undertaken in isolation without adequate support from other key enablers such as Hwange Colliery Company and the National Railways of Zimbabwe.