A Chinese investor, R and F, that was looking at acquiring stake in the Zimbabwe Iron and Steel Company, has finally advised Government that it is pulling out of the deal.
Highly placed Government sources say efforts to renegotiate the deal, agreed on under the previous administration, were unsuccessful.
The deal entailed acquisition of Zisco’s majority shareholding by R and F to pave way for the resuscitation of its Redcliff-based iron and steel plant at a cost of US$1 billion.
Following the review of the deal under the new dispensation, it came out the transaction had not been negotiated in good faith as it gave the investor “excessive offers”.
According to sources, the deal was literally as good as mortgaging the country. Other concerns, which were raised by the Government were that R and F was not in the steel making business, thus compromising its capacity to revive Zisco, once the largest regional integrated steelworks, from the operational point of view.
Apart from the mineral claims held by Zisco’s subsidiary, some of the assets that had not been factored when the deal was negotiated, include the company’s large real estate and a huge stockpile of scrap metal with an estimated value of US$40 million.
“R and F wrote to the Government advising that it was no longer interested. The parties could not agree after the new dispensation ordered the deal to be re-looked into.
“There are several issues the Government was not happy with. It is not like the Government wanted to side line the investor, but wanted a win-win situation,” said one source.
Industry and Commerce Minister Dr Sekai Nzenza, who recently took over the ministry following a recent Cabinet reshuffle, said she was yet to be briefed on the situation.
“Zisco . . . will certainly be a priority but I am yet to be fully briefed,” said Minister Nzenza.