Essar Africa Holdings has emerged as the preferred bidder for a majority stake in Zimbabwe?s state-run steel-maker Zimbabwe Iron and Steel Company (Zisco). Essar Africa Holdings confirmed that it has received official notification from the Government of Zimbabwe for its selection as the preferred bidder for revival of Zisco by way of purchase of Government of Zimbabwe?s 60% equity interest and has been invited to finalise the terms and conditions to complete the transaction.
According to the reports, the Essar group arm was chosen ahead of Jindal Steel and Power (JSPL), including other companies in the fray like Sino Zimbabwe and Sovereign Capitala, a consortium of local and South African investors. Along with JSPL, ArcelorMittal was also one of the frontrunners during the first bidding round in May. However, both the companies were rejected based on same parameters and the process was called off, as reported in the international media.Zisco is an integrated steel company with an annual capacity of one million tonne.
According to industry sources, the entire cost of the transation will be around $ 450 million to $ 500 million including equity plus debts. As part of its proposal, Essar will invest in the revival and expansion of Zisco and enhance its productivity by leveraging Essar?s expertise in the steel sector, Zisco?s existing infrastructure and availability of key raw materials including coal and iron ore.