Source: Balasore confirms Zim Alloys deal – DailyNews Live
BUSINESS WRITER 11 January 2018
HARARE – Indian firm Balasore Alloys (Balasore) yesterday confirmed its
intention to acquire a majority shareholding in leading chrome producer,
Zimbabwe Alloys (Zim Alloys).
Balasore, formerly Ispat Alloys, said it will acquire either by itself or
through its nominees and affiliates, 70 percent shares of Zim Alloys.
Zim Alloys, which is under judicial management, holds 19 780 hectares of
mining areas in different parts of Zimbabwe and has proven resources of
72,25 million tonnes of chrome ore.
Balasore share price gained nearly 6,0 percent in the early trade
yesterday on Bombay Stock Exchange after it announced its intention to
acquire Zim Alloys despite the fact the acquisition is still subject to
fulfilment of certain conditions precedent contained in the scheme of
arrangement.
Last year, Zim Alloys 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 Balasore injecting $100
million into the chrome smelting company.
Half of the amount will go towards settling the company’s debts.
Saruchera said they were now working towards the operationalisation of Zim
Alloys, 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 Zim Alloys.
“However, the blast furnaces are expected to be refurbished to become full
operational within a period of up to 18 months. In the meantime 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 Zim Alloys’ $50 million debt
owed to creditors. It has also planned to revive the furnaces, refurbish
smelters, construct mortal recovery plants and washing plants at Zim
Alloys.
“The company will re-engage its former employees and will also employ more
people as it grows and increase production,” Saruchera said.
Balasore 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.
Zim Alloys 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 Zim
Alloys 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 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.
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