YEARS after Zimbabwe Platinum Mines (Zimplats) offered 15% of the company’s total issued share capital to indigenous Zimbabweans, a buyer is still to snap up the lucrative deal.
First to make its interests public was the National Investment Trust (NIT) then chaired by banker Mthuli Ncube. But NIT failed to raise the money for the transaction.
And naturally another consortium expressed its interest. In 2003, Needgate Mining, a company represented by businessmen Macdonald Chapfika and Paul Chimbodza, became a preferred partner for the Zimplats shares.
The months that followed saw Zimplats and Needgate running around trying to raise US$31 million on both the local and regional markets.
By June of the same year, Needgate had signed a 90-day exclusivity deal with Zimplats. Under the arrangement, the indigenous firm had three months to come up with the funds or lose the stake. What the group was proposing was to do what its predecessor, NIT, had failed to do in three years.
But in the 90 days, Needgate also brought in other participants in the deal reportedly to make the empowerment outfit “more broad based”.
Graname Investments, Jelly Mine, Zimbabwe Mining Development Corporation (ZMDC) and Ngezi Community Trust came into partnership with Chapfika and Chimbodza to form Grassroots Investments.
Some notable characters in Grassroots Investments were the then Cotton Company of Zimbabwe chief executive officer Sylvester Nguni, who is now a minister of state in Vice-President Joice Mujuru’s office.
While it seemed like the deal would be smooth sailing for Needgate and its newly found partners, another consortium –– Barbican Bank –– offered to buy the same stake towards the end of August 2003.
The man behind Barbican was none other than former NIT chairman Ncube, who had spent almost three years chasing the same stake. His emergence on the scene tightened the race.
After failing to get 15% of Zimplats’ issued share capital while at NIT, Ncube had gone on to form a commercial bank, Barbican Bank. This made him a threat to Needgate and its partners.
Strangely this did not stop Zimplats from signing an agreement with Needgate. The agreement prompted Zimplats to announce the transaction to other shareholders on the Australian Securities Exchange (ASX).
The announcement spelt out the structure of the transaction and covered the pros and cons, how many shares would be sold and how much would be paid. Among other notable features of the deal was a 15% discount for Zimplats shares offered to Needgate and its partners on the day of the transaction.
But something happened that Needgate had not anticipated the following year. A cabinet reshuffle in 2004 saw then Mines minister Edward Chindori-Chininga being dropped from cabinet and Amos Midzi coming in at a time when the deal was as good as done.
As the new minister, Midzi naturally needed an appraisal of the empowerment deal.
All seemed to be going well for Needgate by the end of 2003 and the first quarter of 2004.
After a few months with Midzi in office a new consortium –– Nkululeko Rusununguko Mining Company (NRMC) –– emerged on the scene.
Unlike Ncube’s Barbican bid, NRMC’s entrance in the race effectively pushed Needgate out of the game. Midzi as Mines minister gave NRMC government’s full blessings.
In a country where liberation credential and names invoking such memories are strongly considered, Nkululeko Rusununguko (Independence in English) Mining Company did not inspire silence.
Before long, NRMC’s front man Surrender Ncube had been unmasked as a former advisor to Chindori-Chininga before resigning from the ministry to form the empowerment company.
Although speculation was rife that NRMC had big political fishes behind it, the company did not raise the funding for the stake. As the years passed, talk of the Zimplats stake ceased. Then in 2007 NIT said tit was still pursuing the stake.
With Needgate’s announcement last week that it has renewed its bid for Zimplats’ equity, many others will be coming to lay bare their interest.
But whoever wins the stake would have to raise quite a princely sum now.
This is not the first empowerment deal that has taken forever.
Instead of paying US$31 million in 2003, Zimplats share price has surged significantly since then. If history were to repeat itself, then the same old boys will be back in town and lining up at the empowerment feeding trough especially now when government is pursuing an empowerment policy.
A preferred empowerment partner –– Manyame Consortium –– allegedly failed to raise cash for a 30% stake in Metallon Gold Zimbabwe, the country largest gold producer.
Manyame Consortium comprised businessmen John Mkushi, Albert Nhau and Ncube.
To this day, no one knows where the wheels came off for Needgate.