For the umpteenth time, the Zimbabwe Iron and Steel Company, will soon be on the market seeking an investor to revive once Africa’s largest integrated steel giant.
This probably points to the collapse of the controversial takeover of Zisco assets by a Mauritius-based investment company, ZimCoke, fronted by businessman and politician Eddie Cross.
The Government owns 91 percent stake in Zisco.
Since mothballed in 2008, and having been operational since 1942 when the country was still under Britain, Zisco has, in vain officially negotiated with two investors from India and China whose offers appeared so attractive and promising.
But none of them materialised.
First, it was a US$750 million offer from Essar Holdings around 2010 to buy 60 percent shareholding of Zisco.
The deal collapsed in 2015 due to disagreements between Government and the investor over the control of iron concessions owned by Buchwa, a subsidiary of Zisco.
Two years later, Chinese property giant R&F dangled a US$1 billion offer and again, the deal fell by the way side after Zisco Nicodemusly entered into an agreement with ZimCoke to buy the majority of its assets.
The deal involved ZimCoke assuming US$225 million Zisco debt owed to German bank KfW GBMH for the assets.
The assets included 328 hectares of land worth US$16 million, plant and machinery valued at US$168 million, railway wagons and related infrastructure (US$4 million), 48 percent shareholding in ZimChem (US$23 million) and waste products plant (US$16 million).
What made the deal even more controversial, is that the Zimbabwean inter-ministerial taskforce, which was negotiating with R&F was not aware of the ZimCoke deal, only to realise it during its fifth visit to China where it had gone for another round of talks. This prompted the new board, soon after its appointment last year— to order the management to analyse the ZimCoke deal and its impact on the resuscitation of company.
A decision was then taken to terminate the deal on the basis that it made the revival of Zisco impossible since some of its major components would become inaccessible.
The board also cited gross violation of Public Entities and Corporate Governance Act since the previous board led by Nyasha Makuvise, was not involved.
In fact, the former chairman signed exoneration letters, confirming the board was not involved in the deal.
Valuations of assets were also not properly done.
The Cabinet was advised that the deal in its original form would impinge the revival of Zisco as an integrated steelworks.
A decision was then made to review the deal but the board held on to its earlier position after it realised that the debt, which the ZimCoke purported to have taken over was still in the books of Zisco.
The Government recently appointed a taskforce, chaired by the Ministry of Industry and Commerce to work on a roadmap of reviving Zisco.
Government agencies and departments, which include the Attorney General and the recently launched Zimbabwe Investments Development Agency, are part of the taskforce.
In separate briefings to Business Weekly, people with knowledge of the matter said the ZimCoke deal had technically collapsed and the government will be on the market soon looking for a suitable equity partner.
“An different approach will be used to look for a suitable investor for Zisco and many parties will be involved this time,” said one person who refused to be identified because the matter is still private.
“This will be very soon because getting Zisco work again is on Government’s top priorities,” another person familiar with the developments said.
Industry and Commerce Minister Dr Sekai Nzenza was not at liberty to comment but indicated that the enrichment of the Zisco board with diverse skills after adding three members was consistent with government’s desire to revive the company.
“In view of that, the minister is focused on best practice and good corporate governance and has therefore included a diversity of skills to contribute to the strategic direction and transformation of Zisco into a formidable player in the mining sector, “ Dr Nzenza said in a statement on Wednesday.