Tinashe Makichi Business Reporter
Two investors have formally submitted bids worth $4,3 million each for the acquisition of the Selous-based chrome processing company, MonaChrome Pvt Limited, a move that will spare the company from liquidation. MonaChrome judicial manager Mr Christopher Maswi of Fairvalue Management Consultancy said the purchase price of the company shall be $4,3 million for statutory costs, inter alia, master’s fees, legal costs, administration costs and judicial management costs to be paid within 14 days execution of sale and purchase of assets.
“The $2,5 million shall be paid in partial discharge of the debt owed to the secured creditor, Afrasia Bank by MonaChrome. $1,5 million shall be shared among the unsecured creditors,” said Mr Maswi.
He said on the purchase price, $2 million shall be paid within 14 days of execution of Sale and purchase of assets agreement or other transaction agreements.
Chempec Investments and NK Trading submitted bids while Gombe Resources has only expressed its interest in the company.
Mr Maswi said the creditors voted for the investor of their choice and the results of the vote will be unveiled in one week.
Both bids, however, did not submit bank guarantees at the time of finalisation of the creditors report by the judicial manager.
Chempec submitted a letter from Afrasia Bank stating that the bank is prepared to consider issuing a bank guarantee if it is declared a winner. The Judicial Manager, Mr Christopher Maswi also requested for a bank guarantee from NK Trading with their lawyers indicating that a bank guarantee will be submitted before the 14th of this month.
Of the two companies Chempec offered to resume operations at the plant after carrying out necessary refurbishments while retaining some (number not specified) of the current employees of MonaChrome
Chemplec also offered to provide coal fuel from its parent company Makomo Resources which is one of the largest coal producers in Zimbabwe.
NK Trading had previously failed to submit a formal bid as requested by the Judicial Manager saying that they were still finalising discussions with potential partners and key to their proposal was the granting of a licence to export raw chrome by the Ministry of Mines and Mining Development which had not been granted yet.
Gombe Resources did not submit their bid and sighted time constraints for them to come up with a realistic bid and fulfil the bid requirements.
Mr Maswi said Gombe resources registered its expression of interest on the 17th of November 2014.
MonaChrome was formed in 2008 when it was initially registered as a shelf company under the name Monawood Trading (Pvt) Ltd.
In July 2009, it was registered by the Zimbabwe Investment Authority in accordance with the Zimbabwe Investment Authority Act (Chapter 14:03), under investment license number 000521.
In April 2011, the company changed its name to MonaChrome and commenced production after the construction and commissioning of a 6 300KVA smelter.
The smelter produces an average of 36 tonnes of Ferrochrome per day which converts to 12 600 tonnes of Ferrochrome per annum.
There have not been significant changes in terms of chrome industry and there are four out of nine smelters are running in Zimbabwe at the moment that is Zimasco, Afrochine, Xin Yu and Jin An.