The Zimbabwe government will assume ZISCOsteel’s estimated $450 million debt in order to make the steel giant attractive to the Chinese firm R&F which has agreed to invest in the company, Finance Minister Patrick Chinamasa has said.
The ZISCOsteel board will next month convene an Extraordinary General Meeting where it will seek approval from minority shareholders for Hong Kong based firm Tian Li to take over the steel company.
Tian Li is a subsidiary of R&F Properties which last August agreed to invest up to $2 billion in ZISCOsteel.
Chinamasa told a meeting of business leaders yesterday that plans to have ZISCOsteel up and running were well on course with ‘the Chinese investor also fulfilling their side of the bargain’.
The restart of ZISCOsteel, which was the biggest integrated steel manufacturer in Africa before its collapse in 2008, is seen as key to reviving Zimbabwe’s economy.
Its resuscitation would also be crucial to the operations of Hwange Colliery Mine and the National Railways of Zimbabwe (NRZ), which are both struggling but are targeted for revival.
“On Friday I will be gazetting the ZISCOsteel Debt Assumption Bill to make this animal more attractive to the suitor because we agreed that we need new investment. Only 10 to 20 percent of ZISCOsteel is anything to talk about the rest is obsolete. So we need the new investor to come in with the resources to set up a new plant,” Chinamasa said.
Chinamasa said ownership of the iron ore claims which previously fell under ZISCOsteel had been transferred to government.
“The structure is that the mining claims have been moved from ZISCOsteel they are now a stand alone. Maybe we can have a joint venture between government and the investor which mines the iron ore and then sells to the steel company which will be owned by investor,” said Chinamasa.-The Source