HomeBusiness DigestZimAlloys laugh all the way to the bank

Inflation figures doubtful

WHEN Zimbabwe Alloys Ltd (ZimAlloys) went on the market a few years ago, various interests emerged on the business scene to pick up what seemed to be the last crumbs of Anglo American plc’s once-vested investments in Zimbabwe.

 

Anglo American plc, once a major investor and employer in the mining sector had sold about all its businesses in Zimbabwe. In June 2003 Bindura Nickel Corporation had gone to Mwana Africa plc (then a private company).

Two years later, the same group got Freda Rebecca Gold Mine around the same time Ashanti Goldfields was delisting on the Zimbabwe Stock Exchange and  planning a merger with AngloGold.
But later in the same year, new buyers emerged on the scene.

Banker Farai Rwodzi and Adam Molai through their vehicle Benscor Investments got ZimAlloys. With US$10 million, the respected banker and his partner owned a mine, a marked departure from their previous interests.

Although Rwodzi and his business associate had various interests in just about every sector of the economy, mining was not one of them. What many had not predicted was that the duo’s investment would pay off in no time.

Last year, reports that the Johannesburg Stock Exchange-listed, South African metal trader Metmar, was interested in ZimAlloys reached the market. Now ZimAlloys shareholders could soon be swimming in cash.
Although last year’s offer price was much higher than the US$56,3 million on the table now, the duo must be chuckling inside.

Last year, the businesses magnates would have been smiling even more had Metmar paid US$80 million the company had offered for a 40% stake in ZimAlloys.

Metmar last week announced that it was lowering its initial offer to US$56,25 for the 40% stake in the alloy producer.

Rwodzi and Molai will not be the first businesspeople to benefit from such Anglo deals.
Mwana reaped over US$13,2 million in dividends just a year after acquiring 53% of Anglo’s BNC stake. And the years that followed coincided with record prices for nickel and naturally Mwana pocketed lots of cash.
Even Tongaat Hullet, which acquired Hippo Valley from Anglo in 2006, had been upbeat all along until recently when talks of having to sell 51% shareholding to blacks began. But the disposals have also insulated Anglo from sleepless nights which others like Impala, Tongaat Hullet and Metallon are currently facing after government followed through on threats to force foreign and white investors to sell controlling shareholdings to blacks.

Should Benscor Investments decide to dispose of the remaining shareholding, Rwodzi and Molai will further line their pockets with cash. Analysts say Benscor Investments stand to benefit even further after the deal with its 60% shareholding.

Rwodzi refused to shed light on enquiries from the media. His partner would not comment either.
Metmar, without giving reasons, has announced that it would only be “interested” in paying US$56,25 million to Benscor Investment, the controlling shareholder of the Gweru-based company.

As part of the deal announced late last year, Metmar will invest new capital into ZimAlloys while providing technical assistance towards the resumption of production at the company.

Chris Muronzi

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