NewZim Steel likely to become shell company

NEWZIM Steel, formerly Ziscosteel, is likely to become a shell company if the Essar takeover fails as the new owners are borrowing millions of dollars to pay 3 000 idle workers while coalition government partners continue to dither over finalisation of the US$750 million deal.

Report by Paidamoyo Muzulu

Essar has not started production at the giant steel making plant in Kwekwe as some cabinet ministers are demanding a review of the agreement which they argue strongly undervalued the Mwanesa iron ore claims.

Ziscosteel Joint Workers Union leader Bennedict Moyo revealed the workers’ plight to the parliamentary portfolio committee on Industry and Commerce chaired by Willam Mutomba on Tuesday.

Moyo pointed out no new funds have been invested since the much-publicised takeover almost two years ago. He said Essar was borrowing from the CBZ Bank to finance idle workers’ salaries.

Moyo said: “The US$13,5 million borrowed from CBZ to pay our outstanding salaries was an Esssar debt taken using Ziscosteel assets as guarantee.”

Moyo further expressed fears the company would be a shell if the Essar takeover falls through as government continues to squabble over the sale.

“The way the loans are structured is that when the deal is complete Essar will pay, but if the deal failed there is no guarantee that they will pay,” Moyo added.

The workers are worried that any further delays in completing the deal would put more strain on operations since a lot of work needs to be done on the plant and machinery.

Comments are closed.

Top