RioZim waived pre-emptive rights on Murowa


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Murowa

Zimbabwe resources group RioZim says it gave up its pre-emptive rights to Murowa Diamonds ahead of the Midlands-based gem miner’s sale last year because it could not afford the purchase price.

Global giant Rio Tinto sold off its 78 percent stake to RZ Murowa Holdings Limited, along with its 50 percent shareholding in Sengwa Coal in June last year, but government last month said it was investigating the circumstances under which the ownership changed hands.

RZ Murowa is an investment vehicle of major RioZim shareholder, private equity firm Global Emerging Markets (GEM Holdings).

At the sale, RioZim, which controls 22 percent of Murowa and 50 percent of Sengwa, assumed the overall management of both entities.

“The relationship between RioZim and Murowa Diamonds (Private) Limited has not changed as a result of Rio Tinto Plc’s sale of its interests in Zimbabwe last year,” said RioZim in a statement to the Zimbabwe Stock Exchange yesterday.

Reports suggested that RioZim shareholders were not offered an opportunity to exercise their pre-emptive rights over the sale of Murowa, in accordance with the shareholder’s agreement with Rio Tinto, but the local miner said it had no money to fund the purchase.

“On 10 June 2015, the Board of Directors of RioZim passed a resolution to irrevocably and unconditionally waive the Company’s rights of pre-emption in connection with the transfer of the sale of shares to RZ Murowa Holdings Limited,” said RioZim.

“The resolution was made in light of the financial challenges being faced by RioZim, its inability to raise the required financing plus the challenges faced by Murowa Mine which was closed down at the time and faced huge hurdles that required, amongst other things, substantial additional capital investment.”

The decision was also discussed and approved at the Annual General Meeting held on 28 August 2015, it said.

The company kept authorities informed on the developments, it added.

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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