A battle for control of struggling coal miner, Hwange Colliery Company (Hwange), has erupted after wealthy British tycoon Nicholas van Hoogstraten (pictured) offered US$70 million to buy out government shareholding in a bid to rescue the coal miner from total collapse.
TINASHE KAIRIZA/ ANDREW KUNAMBURA
But government responded by making a counter offer to buy Van Hoogstraten out of the company for the same value.
Government has 36,7% shareholding in Hwange while Van Hoogstraten has 31%, making them the two largest stakeholders in the entity.
The drama illustrates fresh no-holds-barred corporate duelling obtaining at the moribund coal miner.
The development comes as Van Hoogstraten expressed frustration over high levels of corruption and incompetence which he says makes doing business in Zimbabwe unsustainably complex.
In an interview with the Zimbabwe Independent in Harare, Van Hoogstraten said he has been pursuing the deal to buy government out of Hwange for the past three years when the mines ministry was led by former minister Walter Chidhakwa.
According to the arrangement, the Mines minister makes decisions on behalf of the company at shareholder level.
He disclosed that he had tabled a US$70 million offer in which mining conglomerate Glencore had interests.
However, he said, government rejected the offer, and instead offered to buy him out.
“In 2016, we said to government that we will buy you out for US$70 million. The offer was put in, translating to 0,86 cents per share. This was still on the agenda at the time of the coup (when former president Robert Mugabe was toppled from power in 2017). I remember at that time I was laughing off government’s ridiculous offer after a meeting with Chidhakwa because I knew they did not have that much money. Of course, I was not laughing in the minister’s office. It was after we had left. Talk is cheap when you have no money. I am still waiting for them (government) to come,” he said.
“After that, it became clear they were not interested in reviving the company. I then withdrew my directors from the company realising that it was going down. The trick is if a company is insolvent you become personally liable for debt. We walked away from there and since then I have been a passive investor.”
Van Hoogstraten said he felt disrespected by government as he was not being consulted on key decisions despite being a significant shareholder, including the placement of Hwange under reconstruction.
Asked about his opinion on the current disastrous situation at the company, he said: “It is not the top priority in my mind. I have been a passive investor and I am not going to lose any sleep over it. It is not going to make any difference now. It would not be a factor whether I am having one or two eggs for breakfast. Some of the people who have been defrauding the company are still there but obviously buying out government is still an offer that I will still consider.”
He also complained that the current Hwange administrator, Bekithemba Moyo, co-founder and director of DBF Capital Partners, was keeping him in the dark on the state of affairs at the company.
“We have not received any reports from the administrator. We did not know what was going on before and we know nothing now. They only called me when they wanted me to agree to something. It was just lunacy; the things they wanted me to agree to.”
Questioned on whether he would consider disposing his stake in Hwange, Van Hoogstraten said he would not do so.
“If I have taken the view to keep my interests in the country, why should I be disposing my stake now after so many years? This is the biggest opportunity for us to move,” he said.
Van Hoogstraten also talked tough about how executives and politicians have over the past three decades been taking turns to strip the company of its assets.
He argued that the company, principally meant to address the country’s power shortages, hurtled towards collapse when he “donated” shares in Hwange which he had bought from the then majority shareholder, Anglo American, in 1982.
“In 1982, we donated shares to Zimbabwe which at the time we thought we were doing the right thing. Between 1980 and 1998, things were okay. Since then, Hwange has been a disaster. This was as a result of incompetence and corruption,” the outspoken tycoon said.
Hwange, he said, was presided over by various ministers and managers who stripped the company of its lucrative coal concessions, which were then parcelled out to shadowy investors.
Van Hoogstraten said the worst period for the company was between 2014 and 2018 under the leadership of axed managing director Thomas Makore.
He claimed that the company experienced record levels of corruption during that period.
“Since 2003, they started stealing concessions from Hwange which were given to individuals who were fronting for offshore Chinese and South African companies who do not pay tax and know nothing about mining. They are only scrapping on the surface,” Van Hoogstraten said.
He also expressed frustration over the high level of mismanagement in some of the companies he has interests in.
“If you have no stake in a business, you are going to rape it. With RTG, it is exactly the same situation. The people who are running this, Nssa and associates know nothing. All they do is to steal as much as they can and after stealing, they borrow as much as they can,” he alledged.
Van Hoogstraten said he holds a 15% stake in Zimbabwe Newspapers (Zimpapers) and the same equity size in National Tyre Services and Cafca.
Mines minister Winston Chitando said he was not aware of Van Hoogstraten’s offer.
“I am not aware of that offer at all. I have not seen anything related to that,” he said.
Chitando refused to comment on allegations that government did not consult Van Hoogstraten when Hwange was put under reconstruction. He referred questions to Justice minister Ziyambi Ziyambi who was not answering calls on his mobile phone last night.
Moyo, the administrator, said they were trying to set up a date with creditors and shareholders.
“The documents are all ready; it’s just that the legal process has taken long than initially envisaged. Mr Van Hoogstraten is a key shareholder and would like to give him a full update on how the administration is progressing,” Moyo said.