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ZimAlloys exits receivership

ZimAlloys exits receivership

Chrome in Zimbabwe

Gweru-based ferrochrome producer, ZimAlloys has exited receivership after clearing its foreign and domestic debt.

ZimAlloys is now under Kuvimba Mining House, which is controlled by the Government of Zimbabwe.

ZimAlloys has been under judicial management since 2013. Grant Thornton was the judicial manager.

Buliso Mbano of Grant Thornton confirmed that the advisory firm handed control of ZimAlloys back to management.

“On May 26, 2021, the High Court of Zimbabwe granted an order to remove Zimbabwe Alloys and Zimbabwe Alloys Chrome from judicial management. The new board and management of ZimAlloys have since assumed management control over the affairs of the companies,” Mbano said.

ZimAlloys has been working on its dump which is inclusive of one commissioned in 2013 in a partnership with a Chinese firm, Jinan in a deal worth about US$2.3m.

The ferrochrome miner was also looking at initiatives to secure funding for refurbishment of its furnaces at the Gweru plant. This initiative was to see the miner engaging its customers and international financiers in raising funding which was expected to run into millions.

Benscore, a company owned by businessman 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 company ceased operations in 2008 and was placed under provisional judicial management in July 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 US$21m worth of the group’s nonperforming loans which were sitting with a number of local financial institutions in a bid to clean the company’s balance sheet.

ZimAlloys together with Zimasco jointly controls the majority of Zimbabwe’s chrome ore claims, mostly found along the Great Dyke.

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ZimAlloys has since ceded part of its ferrochrome reserves to government as part of the ferrochrome producer’s response to a directive given by government which ordered the country’s two ferrochrome giants, Zimasco and ZimAlloys to cede part of their chrome claims.

Initially Landela, a company linked to business tycoon, Kuda Tagwirei, wanted to take over ZimAlloys. But, the takeover of ZimAlloys by Landela was stalled after an appeal to the Supreme Court by Indian Investor Balasore frustrated the acquisition process. ZimAlloys, however, cancelled the US$100m Balasore deal after the Indian investor failed to honour its commitment within the agreed timeframe.

It is understood that the new investors, Kuvimba Mining House, is expediting the revival of ZimAlloys.

 

Business Times

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