The Ruias of Essar Group have pipped Navin Jindal’s Jindal Steel and Power to Zimbabwe Iron and Steel Company (Zisco).
Essar will stump up around $450 million to acquire the 60 per cent stake of the Zimbabwe government in Zisco and pay off the company’s existing debt.
The Ruias beat Jindal, Sino Zimbabwe and Sovereign Capitala, a consortium of local and South African investors, to acquire a majority stake in Zisco, which has a steel capacity of 1 million tonnes per annum along with iron ore and limestone mines.
Jindal and ArcelorMittal SA were the preferred bidders for the company when the Zimbabwe government had put Zisco on the block earlier this year before calling off the exercise.
The Robert Mugabe government had said the companies (Mittal and Jindal) were “too big” for Zisco. It restarted the process, and Essar Africa Holdings, a privately-held firm of the $15-billion Essar group, entered the fray.
This is the second time that the Ruias and Naveen Jindal have locked horns over overseas assets. They vied for Australian coking coal miner Rocklands in 2009, but the Ruias quit and Jindal finally consolidated his holding in that venture.
Essar will have to revive Zisco, which has been operating at low capacity levels for the last several years because of a shortage of both working capital and funds for maintenance and modernisation of plant and equipment. Essar will invest in the expansion of Zisco and enhance its productivity by leveraging Essar’s expertise in the steel sector, Zisco’s existing infrastructure and the availability of key raw materials, including coal and iron ore.
The development marks the entry of Essar in African steel. The Ruias have manufacturing bases in Canada, the US, the UK, India and Indonesia.
Essar has oil and gas assets in Nigeria, Kenya and Madagascar, telecom properties in east Africa, BPO operations in South Africa and coal mines in Mozambique.
Zisco’s operations are situated in Redcliff with distribution centres in Bulawayo, Kwekwe and Harare. Zisco derives raw material security through its subsidiary Buchwa Iron Mining Company.
Firdhose Coovadia, resident director, Essar (Middle East & Africa), in a statement said: “We are delighted to have been selected as the preferred bidder for the revival of Zisco. “We believe Zisco is well positioned to be a low-cost steel producer that can meet the growing demands of the regional steel market and capitalise on the robust forecasted growth in sub Saharan Africa,” he said.
Essar will stump up around $450 million to acquire the 60 per cent stake of the Zimbabwe government in Zisco and pay off the company’s existing debt.
The Ruias beat Jindal, Sino Zimbabwe and Sovereign Capitala, a consortium of local and South African investors, to acquire a majority stake in Zisco, which has a steel capacity of 1 million tonnes per annum along with iron ore and limestone mines.
Jindal and ArcelorMittal SA were the preferred bidders for the company when the Zimbabwe government had put Zisco on the block earlier this year before calling off the exercise.
The Robert Mugabe government had said the companies (Mittal and Jindal) were “too big” for Zisco. It restarted the process, and Essar Africa Holdings, a privately-held firm of the $15-billion Essar group, entered the fray.
This is the second time that the Ruias and Naveen Jindal have locked horns over overseas assets. They vied for Australian coking coal miner Rocklands in 2009, but the Ruias quit and Jindal finally consolidated his holding in that venture.
Essar will have to revive Zisco, which has been operating at low capacity levels for the last several years because of a shortage of both working capital and funds for maintenance and modernisation of plant and equipment. Essar will invest in the expansion of Zisco and enhance its productivity by leveraging Essar’s expertise in the steel sector, Zisco’s existing infrastructure and the availability of key raw materials, including coal and iron ore.
The development marks the entry of Essar in African steel. The Ruias have manufacturing bases in Canada, the US, the UK, India and Indonesia.
Essar has oil and gas assets in Nigeria, Kenya and Madagascar, telecom properties in east Africa, BPO operations in South Africa and coal mines in Mozambique.
Zisco’s operations are situated in Redcliff with distribution centres in Bulawayo, Kwekwe and Harare. Zisco derives raw material security through its subsidiary Buchwa Iron Mining Company.
Firdhose Coovadia, resident director, Essar (Middle East & Africa), in a statement said: “We are delighted to have been selected as the preferred bidder for the revival of Zisco. “We believe Zisco is well positioned to be a low-cost steel producer that can meet the growing demands of the regional steel market and capitalise on the robust forecasted growth in sub Saharan Africa,” he said.
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