Zimbabwe: Fresh Hunt for Zisco Investor

13 April 2021

Senior Business Reporter

The Government is in a fresh hunt for strategic partner to resuscitate operations at the defunct State-owned Zimbabwe Iron and Steel Company (Zisco).

Over the years, the Redcliff-based steel manufacturing plant has been a subject of foreign investor interest with companies such as Essar Africa Holdings, a unit of India's Essar Group having agreed to invest US$750 million in Zisco in 2011, during the era of the inclusive Government.

However, the deal collapsed in 2015.

Again in late 2019, negotiations for a US$1 billion revival deal between Zisco and R & F of China, which had shown keen interest to revive operations at the steel plant also collapsed.

In September last year, Zisco acting board chair Engineer Martin Manuhwa, announced that the organisation had come up with a short-term revival strategy targeting resuscitation of the subsidiaries.

In a letter of invitation to the tender seen by our Bulawayo Bureau, Eng Manuhwa said:

"It (Zisco) is seeking investors who would be interested in availing funds (equity/debt) to resuscitate this former iron and steel producing company."

The expressions of interest should be delivered at Zisco offices in Harare by April 30, 2021.

The Redcliff-based steel manufacturing firm ceased operations in 2008 due to poor management and lack of capital to recapitalise.

Eng Manuhwa said an evaluation of the lodged expression of interest will be carried out.

"And if successful you will be invited to participate in the bidding process for the funding," he said.

Among other requirements, the expression of interest should include the investor's goals, company business culture-including name, physical address and associated company and subsidiaries, ownership structure and names of directors, and period under consideration for either the long haul or the short-term.

Information on financial performance and financial position of the investing company, including the firm's three-year audited financial statements should also be included, said Eng Manuhwa.

The potential investors are also required to include information pertaining their position on the need to evaluate Zisco before the investment.

Zisco either partly or wholly owns equity in companies including ZimChem, Lancashire Steel and Buchwa Iron Mining Company (BIMCO), the holder of iron concessions.

Last year, it was reported that ZimChem was operating at a lower scale and more investment was needed to ramp up production.

Plans were also underway to resuscitate the Zisco mills section selected sections for manufacturing processes whose output would provide feed stock for Lancashire Steel.

It is believed that long-term revival efforts for Zisco would be done once the Government secures a serious investment partner.

Eng Manhuwa is on record saying there was scope for positive prospects at Zisco and the company was ripe for local, regional and international investors.

At its peak in 1999, Zisco produced up to one million tonnes of steel annually and the entity was among Zimbabwe's major foreign currency earners.

The company also employed over 5 000 people directly and thousands several others across the engineering and steel value chain.

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