Plans to resuscitate ferrochrome producer ZimAlloys have been scuttled as the ongoing legal wrangle between the company’s judicial manager and Indian investor Balasore rages on, it has been established.
The Gweru-based ferrochrome firm is currently locked in a legal battle where the Indian investor is accusing ZimAlloys judicial manager, Grant Thornton and Camelsa of unfairly terminating the acquisition contract that had been agreed upon.
ZimAlloys, through its judicial manager, terminated the agreement it had entered into with Balasore Alloys for the disposal of its 70% shareholding to the Indian firm for $90 million alleging that the Indian firm had failed to raise the required funds on the agreed upon dates.
The court case is now set for its first hearing on June 25, 2019.
This continued fight has seen the ferrochrome firm failing to openly engage new investors.
A source close to developments told Business Times that the wrangle has frustrated efforts to revive the company.
“There are a lot of investors interested in the company but the existing court case has been a hindrance.
Despite the continued legal fight, a local consortium, Landela is reportedly looking to snap up about 68 percent stake in the Midlands based ferrochrome producer.
The ferrochrome miner is also working on its dump which is inclusive of the one commissioned in 2013 in a partnership with a Chinese firm, Jinan in a deal worth about $2,3 million.
In addition the ferrochrome miner has also started looking at initiatives to secure funding for refurbishment of its furnaces at the Gweru plant.
This initiative will see the miner engaging its customers and international financiers in raising funds expected to run into millions and will take nine months to complete.
Benscore, which 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 former Anglo American Plc ferrochrome producer which stopped operations in 2008 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 $21 million worth of the group’s non-performing loans which were sitting with a number of local financial institutions in a bid to clean the company’s balance sheet.