YOUTH, Indigenisation and Economic Empowerment minister Francis Nhema has approved South Africa-based Scaw Metals Group’s indigenisation and empowerment compliance plan in a deal many feel shows a marked shift from Zanu PF’s earlier hardline stance.
Scaw is a leading African producer of a diverse range of high-quality steel products, with a global reach through its various operations around the world and key facilities in Johannesburg, providing proximity to key African mining locations and industrial centres.
Currently, Scaw’s shareholders are the Industrial Development Corporation of South Africa (IDCSA) at 74%, Main Street 510 (Pvt) Ltd (consisting of South African Black Economic Empowerment partners Izingwe Holdings, Shanduka Resources and Southern Palace Group) at 21%, and a South African employee share ownership plan with the remaining 5%.
IDCSA bought the 74% stake in Scaw for R3,4 billion from Anglo American Corporation last year.
According to a letter seen by the Zimbabwe Independent dated October 17, Nhema agreed to an indigenisation plan that will see a 21% equity stake in the Scaw group’s local unit –– Haggie Rand Zimbabwe (Pvt) Ltd, based in Bulawayo –– being sold to an eligible employee ownership scheme within six months from the date of approval by the minister.
The next phase of the indigenisation plan entails Haggie Rand disposing of a 10% equity stake to the National Indigenisation and Economic Empowerment Fund by December 2014.
The third stage of compliance will see the Bulawayo-based company disposing of a 10% equity stake to a consortium of eligible pension funds by March 2015, while the final stage will see a 5% stake being sold to eligible pension funds by March 2016.
This, analysts say, marks a departure from Zanu PF’s position as championed by former Indigenisation minister Saviour Kasukuwere who wanted foreign companies to comply immediately.
President Robert Mugabe’s speech at the inauguration of the new government in August hinted at a softer stance on indigenisation.
Analysts say this is in line with Mugabe’s vision to attract investment in the twilight of his more than three-decade-long career as leader of the country and party that ushered in Independence from Britain in 1980.
Kasukuwere, whose modus operandi was widely considered abrasive, was transferred to the Water, Environment and Climate ministry.
The appointment of Francis Nhema has been seen as that of a more level-headed operator, indicating something of a paradigm shift.
As Indigenisation minister, Kasukuwere structured controversial deals valued at more than US$1,7 billion with foreign mining companies. He signed MoUs with Zimplats (US$971 million), Mimosa (US$550 million), Anglo-American (US$142 million), Pretoria Portland Cement (US$27,8 million) and Caledonia (US$30 million).
In the Scaw indigenisation plan approved by Nhema, Addington Chinake of Kantor & Immerman acted for Haggie Rand.
The latest deal comes after Nhema last week said banks would not be required to immediately sell controlling equity stakes to indigenous Zimbabweans.