ET reported that Jindal Steel and Power Limited has launched a bid to buy 60% stake in ailing Zimbabwe Iron and Steel Company to deepen its presence in Africa and secure it significant iron ore reserves.

The report cited Mr Ashish Kumar Africa business head of JSPL as saying that “Since we are already operating in Mozambique and South Africa, the acquisition of Zisco would give us a wider reach in the continent.”

Mr Kumar said “In our proposal, we have suggested a mechanism to the government to settle the existing debt.”

Mr Kumar declined to reveal the size of the deal.

JSPL is expected to fund the transaction through a mix of debt and internal accruals.

The JSPL deal, however, is subject to the Zimbabwe government clearing all outstanding liabilities of Zisco.

As per report, Zisco owns a 0.8 million tonne steel plant, shut since 2008, limestone reserves of 60 million tonne 100 million tonne of iron ore reserves.

The Zimbabwe government has been looking for a suitor for Zisco for sometime. It invited bids last October that attracted JSPL and ArcelorMittal, the world’s largest steelmaker. The bids, though, were cancelled last month, reportedly on the pretext that the two entities were too big and the government was looking for a medium-sized investor for Zisco. But worries over Zisco’s mounting debts forced the government to re-invite the steel companies. It is unclear if ArcelorMittal has submitted a bid again.

(Sourced from ET)