Financial Gazette (Harare)
Munyaradzi Mugowo
28 April 2011
ESSAR Africa Holdings, a unit of India’s Essar Group which acquired a controlling interest in Zimbabwe Iron and Steel Company (ZISCO) last month, is expected to rebra-nd the steelmaker to Essar Steel Zimbabwe and appoint a new board, including a chairperson and chief executive officer (CEO), this year.
The Mauritian-based company last month signed three legal agreements with government – a shareholder agreement that gave it control of 54 percent of ZISCO, a strategic partnership agreement that gave it the right to restructure Africa’s sole integrated steelmaker and an investment agreement that set terms for the restart programme.
Nyasha Makuvise, the CEO of banking group CBZ Holdings, currently chairs the ZISCO board. He is tipped to remain on the ZISCO board to represent government’s residual interest.
In terms of its strategic partnership agreement, Essar Africa Holdings has the right to appoint about 54 percent of the ZISCO board of directors and to restructure the company’s management and staff to suit its strategic plan.
“The board of ZISCO shall be appointed by shareholders. The composition of the board of directors shall at all times reflect the shareholding structure of the company,” reads the agreement.
“Essar shall retain as much as possible of the current ZISCO staff. In selection of new staff, Essar shall consider existing staff of ZISCO, subject to the qualifications, knowledge, skills, experience, and personal merit of staff.”
The sell-off diluted government’s shareholding in the steelmaker to 35,6 percent, but left untouched minority interests held by Louth Mineral South Africa (three percent), Tonexon Investments (2,79 percent), Lancashire Steel (1,76 percent), Stewards & Lloyds (1,76 percent), Franconian Investments (0,81 percent), Amzim Iron and Steel Limited (0,75 percent) and Zambia Copperbelt Investment (0,13 percent).
Essar is understood to have submitted a ZISCO business plan to government for review, and is awaiting official authorisation to proceed with the restart programme under which the steelmaker will be rebranded and its board and management restructured.
The rebranding also extends to the Buchwa Iron Mining Company (BIMCO) in which Essar has acquired an 80 percent equity interest through a joint venture mining company it is setting up with government, which has been diluted to 20 percent.
BIMCO’s iron ore reserves are estimated at 25,135 billion tonnes, 135 million tonnes in Redcliff and 25 billion, excluding claims, at Mwanezi near Chivhu.
Under the strategic partnership agreement, Essar agreed to include in its turnaround plan for ZISCO, the relining of blast furnaces, repairs and rebuilds of coke oven batteries, relining of lime kiln, repairs of coke oven gas holder, the supply of shunting locomotives and coal ovens, among others.
AllAfrica – All the Time
Taken from:
New Zisco Board to Be Named