An Indian conglomerate has signed a deal to take over Zimbabwe’s huge state-owned iron and steel company, and invest over US$750 million in the venture.
Under the deal, signed with the authorities Thursday, Indian group Essar Africa Holdings will pay the government a symbolic price of US$45 million for a 54 percent stake in the Zimbabwe Iron and Steel Company (Ziscosteel), and take over the company’s debts amounting to more than US$340 million.
In addition, the Indian firm will invest US$750 million in Ziscosteel, the second biggest iron and steel company in Africa.
The iron and steel company had ground to a halt, saddled by debts and broken down furnaces.
The government had 89 percent shareholding in Ziscosteel, and will now remain with 35 percent, with minority shareholders retaining an 11 percent stake.
At its peak, the iron and steel maker produced up to one million tonnes of steel a year, but years of under-investment and mismanagement had reduced this to zero.
Essar Africa Holdings’ investment will be one of the largest Zimbabwe has secured in recent years, and the Indian firm has said it may also consider building a power station to supply Ziscosteel.
The country suffers a huge power deficit, generating only 65 percent of its electricity requirements
