Balasore AlloysBSE -2.27 %, a Pramod Mittal group company, has entered into a deal to acquire 70% share of Zimbabwe Alloys consequent upon a scheme of arrangement sanctioned by the High Court of Zimbabwe on December 20, 2017. The company received the approval on January 8, 2018. The deal size is estimated at a little over US$ 90 million.
The deal would involve a cash payment of US$ 16.47 million for acquisition of 70% shares from existing shareholders. It would also entail a further payment of US$74.26 million to creditors towards injection of working capital and for capital expenditure. The payment to the creditors and members of the company will be done in a staggered manner, an official statement said. “The acquisition of ZAL which operates in a similar business segment in a separate geography will help Balasore Alloys in creating synergies and in expanding its business base to different parts of the world,” the company said. The development perked up the Balasore Alloys scrip which jumped 14.87% from its previous high on the BSE on Wednesday to close at Rs 91.15.
Balasore Alloys Ltd, by virtue of the scheme being approved by the requisite margins of members and creditors of Zimbabwe Alloys Ltd (ZAL), shall acquire either by itself and /or through its nominees and affiliates, 70% shares of Zimbabwe Alloys Ltd (ZAL), 1899 Bristol Road, Heavy industrial sites, Gweru, Zimbabwe, currently under Judicial Management, Balasore Alloys said in an official notification to the BSE on Wednesday.
ZAL holds 19,780 hectares of mining areas in different parts of Zimbabwe, which has proven resources of 72.25 million tonne of chrome ore. Apart from this, Zimbabwe Alloys Chrome (Pvt) Ltd, a wholly-owned subsidiary of ZAL has a ferro chrome plant. Incidentally, Zimbabwe is home to the second largest chrome ore reserves in the world. The company is engaged in mining of chrome ore and marketing of chrome ore concentrates and manufacturing and marketing of high carbon ferrochromium and ferrosilicon chromium. The official statement said “the scheme is subject to fulfilment of certain conditions precedent contained in the scheme of arrangement. Further the scheme is subject to section 191 of Companies Act of Zimbabwe.”
Source: Economic Times