Zimasco Placed Under Corporate Rescue Amid US$77 Million Debt Crisis

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Zimasco, one of Zimbabwe’s largest ferrochrome producers, has been placed under corporate rescue following a court application by businessman Shepherd Tundiya, who claims the company owes creditors over US$77 million. The move comes after Tundiya alleged that Zimasco breached a 2017 agreement with his company, Avim, to supply coke peas for its furnaces.

Tundiya argued that Zimasco’s failure to honour the contract caused Avim losses exceeding US$67 million. He also highlighted Zimasco’s mounting debts to suppliers, the Zimbabwe Revenue Authority (ZIMRA), ZESA, and its employees. The High Court appointed Wilson Manase as the corporate rescue practitioner, placing Zimasco under administration and shielding it from creditor lawsuits.

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Tundiya suggested that Zimasco, owned by China’s Sinosteel, should be handed over to new investors. “There are potential investors targeting chrome mining due to the spike in demand. Investors with equity financing can be brought on board,” he said.

The corporate rescue comes as Zimasco seeks to expand its operations, including plans for new furnaces and a 100MW solar plant in Kwekwe. Despite these ambitions, the company has faced challenges, including unstable ferrochrome prices and high electricity costs, leading to repeated furnace shutdowns.

Tundiya’s involvement adds a layer of controversy, given his contentious history. In 2018, he was accused of leveraging political influence to push out a contractor from Hwange Colliery. He was also implicated in a 2019 case involving alleged blackmail and the release of stolen vehicles.

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