The Industrial Development Corporation of Zimbabwe (IDCZ), will restart the process of evaluating investments bids for Deven Engineering and Willowvale Motor Industries (WMI) following the recent appointment of the new board.
Sources within IDCZ told Business Weekly that a management transaction committee has requested indications from prospective investors if they were still interested in the two automobile businesses.
IDCZ short-listed Faramatsi, an investment vehicle linked to Doves Funeral Assurance and Glenwood Investments to acquire IDCZ’s 74 shareholding in Deven.
Three companies including Croco Motors and a leading tobacco merchant were selected for WMI.
In a recent update on the restructuring of state owned entities, the Treasury said successful bidders for Deven and WMI had been submitted to the Ministry of Industry and Commerce for consideration.
“The adjudication process will restart and a management transaction committee is looking at that,” said an official who requested not to be named because the matter is private. “So what happened is that the board requested confirmation of continued interests from potential investors indicating if their bids still stand.”
“These are strategic transactions and it appears that the new board might not have been comfortable to endorse the deals they have not been part of,” added the source.
No comment could be immediately obtained from IDCZ by the time of going to press.
In 2018, Government approved restructuring strategies of IDCZ subsidiaries and associate companies through the State Enterprises and Parastatal Reform Framework.
The restructuring is not only confined to total disposal subsidiaries and associate companies, but also entails liquidation, privatisation and partial privatisation. So far, IDCZ has disposed of its 51 percent shareholding in Almin Metal Industries, 49 percent interest in Stone Holdings, while Zimbabwe Copper Industries was liquidated.
Investors for Zimglass has been secured while potential partners for Irazim Textiles and Travan Blankets have been identified. The IDCZ also identified a partner who injected capital into Amtec Motors thus reducing the IDCZ’s shareholding from 55 percent to 27,5 percent. It has also received bids for Chemplex Holdings.
Deven’s core competence is trucks and bus body manufacturing done on rolling chassis or from knocked down kits. It can build trailers, tankers and specialised vehicle bodies such as compactors, dumpers, tippers, refuse trucks and repairs.
WMI is one of the leading vehicle assemblers in Zimbabwe. It used to assemble nearly 20 000 vehicles per year before production plunged. Some of the brands which WMI assembled include Mazda, Nissan, Mitsubishi and Toyota.
A recent report by the government on the state of industry during the lockdown period revealed that the motor industry was among hardest hit sectors.
It said WMI did not record any production since March this year. Mutare based vehicle assembler, Quest Motors, is operating at 5 percent capacity.
Coach builder, AVM Africa, registered a 90 percent reduction in production during the past five months due to closure of markets for buses such as schools, intercity and rural buses, the report noted.-ebsuinessweekly.o.zw