Munyaradzi Musiiwa Midlands Bureau
Gweru-based giant ferrochrome producer, Zimbabwe Alloys, under judicial management by Grant Thornton International, is expected to start operating in the next 18 months after its creditors approved a $100 million investment deal with Indian Investor, Balasore Alloys Group.
In an interview, ZimAlloys judicial manager Reggie Saruchera, said the company had met its creditors and unveiled the new investor after which the creditors approved the proposed deal that will see the Indian company injecting $100 million into the chrome smelting company.
Half of the amount will go towards settling the company’s debts. Mr Saruchera said they were now working towards the operationalisation of ZimAlloys, which will see the re-building of blast furnaces and construction of other washing and smelting plants.
“We unveiled the new investor to our creditors last week and we are happy to announce that the deal has been approved. The investor is now moving in and will soon resume operations at ZimAlloys.
“However, the blast furnaces are expected to be refurbished to become full operational within a period of up to 18 months. In the mean time the investor will also settle the company’s debt while at the same time setting up other small smelting plants,” he said.
Balasore has committed itself to settling ZimAlloys’ $50 million debt owed to creditors. It has also planned to revive the furnaces, refurbish smelters, construct mortal recovery plants and washing plants at ZimAlloys. 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 increase production,” he said.
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. The group’s companies are spread across six countries including Libya, Bosnia, Philippines, Azerbaijan and Uzbekistan.
The other group of companies in India are Ispat Industries Limited, Ispat Metallics India, Ispat Profiles India, Gontermann Peipers India. ZimAlloys is working on their 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 is 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 on July 24, 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 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.
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.
The revival of one of the country’s biggest ferrochrome producer Zim Alloys, has rekindled hope for the sleepy city of Gweru.