IDC to dilute Chemplex stake, recapitalise

by Nobleman Runyanga

Following years of stagnation occasioned by a combination of years of economic challenges, lack of capital and the effect of the United States sanctions on the company, Chemplex Corporation Limited is set to recapitalise.

This was revealed in a request for expressions of interest notice which was published this week by the accounting firm and financial advisor, Ernst & Young (Zimbabwe) on behalf of Chemplex’s owner, the Industrial Development Corporation (IDC).

“The IDC has mandated Ernst & Young Advisory Services to facilitate the recapitalisation of Chemplex Corporation Limited in order to capacitate the fertiliser value chain. This is to be achieved through the dilution of IDCZ’s 100 percent shareholding in Chemplex and, where appropriate, the dilution and/or disposal of its non-fertiliser business by identifying a potential strategic equity partner(s) for Chemplex,” read part of the notice.

Apart from its fertiliser value chain-related companies: Zimbabwe Phosphate Industries, ZFC and Dorowa Minerals,  IDC also wholly or partly owns Allied Insurance, Chemplex Animal and Public Health and Chemplex Marketing.

IDC is seeking strategic equity partners to invest in both its fertiliser value chain companies and non-fertiliser ones. The company did not indicate how much of its stake in Chemplex it intended to offload opting, instead, to leave it to potential suitors to indicate their proposed stake sizes.

“IDCZ is inviting herein potential strategic equity partner(s) to invest in Chemplex fertiliser value chain and/or in any one or more of the company’s non-fertiliser businesses,” read the statement.

The conditions for consideration for shortlisting include submission of company profiles, indicating preferred entities and indicating whether or not the interest included fertiliser value chain companies. Potential investors are further required to indicate the due dilligence time they require, strategic intent for the targeted business, highlighting plans for technology transfer, where these apply, willingness to inject additional capital and disclosing any potential wider markets for Chemplex brands.

Chemplex Corporation was born when the South African Explosives and Chemical Industries (AECI) Limited entered the Zimbabwean market in 1924 to supply mining explosives and chemicals to the local mining industries. When AECI divested from the country in 1990, IDC bought its operations which it re-named Chemplex Corporation.