Mauritian firm 'frontrunner' for Zisco

| Friday October 22, 2010 00:00

The fate of Essar Energy Holdings' bid is to be decided by the three principals in Zimbabwe's inclusive government: President Robert Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime Minister Professor Arthur Mutambara.

Government intends to sell about 60 percent of the shareholding in Zisco in an attempt to secure a cash injection that will lead to the revival of the troubled steelmaking giant.At least four investors were in the running for the coveted stake, including Jindhal Steel & Power, Essar Energy Holdings, Sino-Zimbabwe and Sovereign Capital, a consortium of local and South African investors.

One of the most high-profile investors to express interest in acquiring Zisco, ArcelorMittal South Africa, has pulled out of the latest bidding race.

However, it remains to be seen whether Essar Energy will get the blessings of Mugabe and his partners in the inclusive government in light of what happened to investors short-listed earlier this year, who were rejected by the Presidency on the grounds that they were 'too big' for a firm like Zisco and concerns that they might dictate terms that were not always in the national interest.

Essar Energy Holdings operates a number of subsidiaries involved in the exploration, production, refining and retailing of petroleum products and consumable fuels. Part of a larger group, Essar Energy has a market capitalisation of $10-billion and is planning a listing on the LSE.

Zisco stopped operations after succumbing to serious financial limitations, which had pushed the firm into selling scrap metal accumulated over 40 years to survive before finally going down on its knees.

At its peak, the former steelmaking giant produced between 700, 000 t and one-million tons of steel a year.-(Engineeringnews)