HomeBusiness DigestUS$1bn Zimplats windfall for NIEEF

US$1bn Zimplats windfall for NIEEF

THE National Indigenisation and Economic Empowerment Fund (NIEEF) has received a US$1 billion windfall following the conclusion of an empowerment transaction expected to be signed in the capital soon.

Report by Clive Mphambela

Well-placed sources told businessdigest this week platinum giant –– Zimplats –– has finally resolved to comply fully with Zimbabwe’s indigenisation laws, culminating in the company signing over a 51% stake to indigenous shareholders.

The latest plan will see NIEEF taking up 31% equity while employees and management will get a 10% share, with the remaining 10% reserved for the community share ownership scheme.

According to sources, signing of the new scheme was postponed from last month after the parties to the agreement sought to clear outstanding issues.

NIEEF has to date concluded transactions worth over US$750 million at current market prices. The deals which have been concluded include a 16% stake in Blanket Mine worth US$20 million, 9,7% stake in Pretoria Portland Cement valued at US$13 million, a 21% stake in Unki Platinum agreed at US$162 million as well as a 31% stake in Mimosa Platinum at US$355 million.

As part of the Mimosa and Unki transactions NIEEF has also assumed government’s US$57 million debt as well as a US$142 million cession of claims loan which the Ministry of Mines owed to Unki.

According to sources, the latest deal will add almost US$1 billion to the assets under management by NIEEF which will rise to about US$1,8 billion. With net of the loans taken over at US$200 million, the transaction triples the value of NIEEF to over US$1,550 billion.

To date over US$980 million has been raised via Notional Vendor Financing (NVF) loan structures.

“The mining deals effectively place a real value of several billions to the sovereign assets that have hitherto been seriously undervalued. Previously, mining firms where only liable for meagre mining licence fees as well as royalties,” the source said.

According to well-placed sources, Zimplats will transfer 10% to a community share trust whilst 10% will accrue to workers and management. The balance of 31% will be transferred to the NIEEF to achieve the 51% local shareholding threshold.

Going forward, expected growth of the value of the NIEEF portfolio will be driven by similar transactions which will be concluded soon.

Government is yet to account for deals with Tongaat Hullet and Old Mutual.

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