The High Court has cancelled the US$100m deal involving Indian investor, Balasore, and the local mining giant, ZimAlloys, following a protracted legal battle that ensued after the judicial manager had terminated the deal.
The ferrochrome giant had been locked in a legal battle with the Indian investor who accused ZimAlloys judicial manager, Grant Thornton and Camelsa, of unfairly terminating the contract they had signed.
The judgment which was issued yesterday by Justice Happias Zhou terminated the contract and authorised Grant Thornton Camelsa to start searching for a new investor. Balasore was ordered to pay the legal costs.
Lawyer Miranda Khumalo, a partner at Atherstone and Cook, who represented the judicial manager said the scheme of arrangement had been set aside and the “judicial manager has been given authorisation to look for a new investor”.
The investment deal with Balasore was signed last year but had to be terminated following revelations that the Indian company failed to honour its commitment.
Despite the continued legal fight, a local consortium called Landela which is allegedly linked to business tycoon Kudakwashe Tagwireyi, is looking to snapping up a 68% stake in the Midlands-based ferrochrome producer.
Landela is a consortium consisting of local investors interested in ferrochrome production.
While efforts to secure an investor are ongoing, ZimAlloys is also working on its dump, including one commissioned in 2013 in a partnership with a Chinese firm, Jinan.
The Jinan deal is worth about $2.3m.
The deal notwithstanding, ZimAlloys is looking for funding to refurbish its furnaces at the Gweru plant.
Benscore, which is owned by the businessman Farai Rwodzi, acquired ZimAlloys from the Anglo-American Company in 2005 before downscaling production and switching off its blast furnaces and started processing its dumps.
ZimAlloys stopped operations in 2008 and was placed under provisional judicial management in July 2014. The company was put under final judicial management in November 2014 after the ferrochrome producer’s debt had risen to alarming levels.