eBusiness Weekly
Tinashe Makichi
Sino-Steel Corporation has put on hold plans to sell its controlling interest in one of Zimbabwe’s largest ferrochrome producer, Zimasco.
South Africa based Portnex, which is currently leasing Zimasco’s furnaces had been one of the front runners to take over a stake in the company.
Judicial manager Reggie Saruchera told Business Weekly that Zimasco had attracted huge interest from investors on strong signs of recovery following strategies instituted to revive the firm.
Zimasco was placed under judicial management in June last year and since that time focus had been on the implementation of a business turnaround plan.
“Ever since it started producing, the company has generated a lot of interest from investors but the Chinese shareholder, Sinosteel Corporation has decided against the sale of the company. The shareholder played its part also by availing about $6 million showing their commitment to their investment in Zimbabwe.
“Therefore despite interest generated, Zimasco is not for sale at the moment and we are looking at making sure we maintain our momentum,” said Saruchera.
The ferrochrome miner this year paid out about $20 million as dividend to its creditors who comprise of private companies, state authorities and financial institutions.
Zimasco was placed under provisional judicial management in June 2016 after its indebtedness to banks and creditors had increased to unsustainable levels. The integrated ferro-chrome producer’s debts reached about $65 million in 2015 from $38 million in 2009 while servicing these debts had become a challenge.
Saruchera said another dividend to creditors would likely be paid in December this year, a sign that the company was now firmly on a strong recovery path.
“We are going to pay another dividend by the end of this year and all this is a sign of growth and resilience of the company. All Zimasco operations are running in full throttle at the moment,” said Saruchera.
In addition to leasing furnaces, Zimasco is providing South African Portnex with support services on a cost recovery basis. These support services include laboratory, weighing, sizing and crushing, transport, security, secondary metal recovery.
Zimasco allowed its mining contractors to supply chrome ores from Zimasco’s claims to Portnex in the interim period, to guarantee feedstock, as Zimasco prepared to resume its furnace operations. Zimasco secured an export licence, which has seen the company exporting 240 000 metric tonnes per annum.
