Zisco Bill awaits presidential assent

Zisco Bill awaits presidential assent
Published: 24 May 2018
THE Zimbabwe Iron and Steel Company (Zisco) Debt Assumption Bill is now awaiting presidential assent after being approved by the Senate last week.

Finance Minister Patrick Chinamasa indicated that government was finalising the legal documentation to pave way for its takeover of Zisco debts, estimated at about $500 million.

"The Bill will go (for presidential assent) as it is. When we finalise the legal documents even when the Bill is an Act of Parliament, there is provision in this Bill which allows us to verify and to validate, then the schedule will be amended accordingly by the Debt Management Office," Chinamasa said.

In addition to the Zisco Bill, three other Bills are awaiting President Emmerson Mnangagwa's assent. These are the Shop Licences Amendment Bill, the Electoral Amendment Bill and Insolvency Bill.

Zisco, the beleaguered steelmaker which was once one of Africa's largest integrated steelworks, ceased operations in 2008 due to choking financial constraints and its opening has been a matter of false starts for the past seven years.

In 2006, an Indian firm, Global Steel Holdings, was given management control of the firm after promising to inject $400 million in a rehabilitate, operate and transfer arrangement, but the deal failed to materialise under unclear circumstances.

Another Indian investor, Essar Africa Holdings Limited (EAHL), signed a deal with government in 2011 to revive the former steel giant.

Under the agreement, EAHL committed to invest about $750 million which was to include relieving government and Zisco of all its liabilities.

This included guaranteed foreign debt, historic liabilities in respect of trade and other creditors, including unpaid salaries and associated benefits owed to the employees, fixed capital investment for reviving the plant to 1,2 million tonnes per annum steel production and working capital requirements.

Subject to the conclusion of discussions with minority shareholders Zisco, which had been rebranded NewZim Steel, was to be owned 40 percent by government and 60 percent by EAHL.

But EAHL pulled out of the deal and stopped engagements with government on the planned revival of the Redcliff-based steel producer due to complications involving the steel-maker's global debts

The deal also stalled due to bickering within the then inclusive government over mineral concessions.

The deal later suffered from government pressure to have the Indian firm take over all government debts.

Last year, a Hong Kong-based steel manufacturer, R and F, signed a $1 billion deal with government to revive operations at Zisco.
- fingaz
Tags: Zisco,


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