Firm mulling sale of stake in Zim ferrochrome producer
Benscore Investments is considering selling a majority stake in Zimbabwe Alloys Chrome to one of three investors in a bid to rescue the ferrochrome producer, according to a person with knowledge of the matter.
Afro-Chine Smelting, a unit of Tsingshan Holding Group, is one of the companies to con- duct due diligence at ZimAlloys and may sub-mit an offer by the end of this month, says the person, who has asked not to be identified because the matter is private.
ArcelorMittal, the world’s largest steelmaker, is another of the potential bidders, the State-owned Herald newspaper reported on June 11, citing an unidentified official.
ZimAlloys, which controls almost 40% of the southern African country’s chrome reserves, was placed under the judicial management of audit firm Grant Thornton Camelsa almost two years ago, after being hurt by a government ban on exporting unprocessed chrome ore and fall- ing prices of ferrochrome. For Benscore to sell control of the company to an overseas investor, by cutting its 85% stake to a minority holding, would require special dispensation to skirt a Zimbabwe law that caps foreign ownership at 49%.
Benscore plans to retain control of ZimAlloys’ mineral rights, according to the person. Zimbabwe holds the biggest chrome reserves after neighbouring South Africa.
The chrome producer, which was controlled by Anglo American until 2005, has struggled to raise $40-million to rebuild three obsolete chrome smelting furnaces that were shut down in 2008. Ferrochrome, made by processing chrome ore in a smelter, is used in the produc-tion of stainless steel.
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