A Botswana based Indian company, which signed a five year deal to revive the moribund government owned Lancashire Steel has said it is committed to revive the parastatal once government signs the requisite agreements.
A year since Whinstone Enterprises and Lancashire Steel signed a deal to revive the wire manufacturing firm, little progress has been recorded with government said to be slowing things because of red-tape.
Once consummated the deal signed last year in July, will give Whinstone 50% ownership of the Kwekwe based firm after five years.
Whinstone’s Deepak Verma, speaking from his Botswana base said his company is waiting for documentation from the Zimbabwean government which will make it possible for them to begin operations.
“The deal is a joint venture between Whinstone Enterprises and Lancashire Steel, where Whinstone will revive the plant and equipment with the skill from Zimbabwe. If need be what we cannot find in Zimbabwe will be imported so that Lancashire comes back in production market
“The joint venture is key to both Lancashire as well as Whinstone and very strategic especially to Lancashire given its legacy debt,” Verma said.
Whinstone Enterprises once had interests in one of Botswana’s biggest steelworks company Pula steel that was forced into liquidation. Verma said Lancshire’s wire making plant will need mordernisation.
He added that once the Ministry of Industry endorses the agreement his company will start bringing in the requisite equipment.
“There is need for the exemption of duty on the goods to be imported as raw materials or feedstock to Lancashire Steel.
“We also need an exemption on export of steel scrap which has to be converted into the feedstock of Lancashire. The exemption of this export of scrap is needed up to 3000 to 3300 tons per month as that is what Lancashire Steel can take as import of the feed stock,” he said adding these part of key enablers for operations to begin.
Reports have however claimed the Verma family which owns Whinstone Enterprises a company that had a 17% stake in Pula Steel, while 52, 35% was held by the Botswana government through Bamangwato Concession Limited (BCL) was under investigation for corruption in the neighbouring country following the closure of the company in 2016 under unclear circumstances.
But Verma dismissed the allegations as baseless.
“Lancashire needed an investor. We saw its potential before anyone else could do and came forward with a joint venture deal which will benefit Zimbabwe.
“Pula Steel is under liquidation because its parent shareholder got liquidated,” he said.
Verma, however could not divulge the amount his company would invest.
“All that information is confidential but it is in the pack which I submitted to government of Zimbabwe,” he said.
According to a document signed between the Botswana based company and Lancashire major routine maintenance had to be undertaken before the commencement of the project.
Early this year a US$1 billion Chinese deal to resuscitate the Zimbabwe Iron and Steel Company (Ziscosteel) is facing collapse after government changed its shareholding offer to Zhang Li, the president of Guangzhou R&FA.
In 2011, Indian firm Essar Africa Holdings’ bid to take over in a deal worth $750 million also hit a brick-wall due to bickering in the then inclusive government.
Source : New Zimbabwe