Heavy equipment company’s divestment in Barzem leaves Zim mining, construction sectors in a lurch

By African Mining Market

Barloworld is divesting out of its Zimbabwean associate unit after terminating distributorship agreements for heavy earthmoving equipment with Barzem in the southern African country.

The move follows Barloworld’s announcement in June 2022, it would be terminating its distribution agreement with Barzem with effect from October, although it would continue to be the sole distributor of Caterpillar equipment in the country.

This has left the Zimbabwean suppliers of earthmoving equipment and other heavy machinery to miners and construction companies scrambling to find replacements.

Barloworld is divesting out of Barzem, which had been the supplier of Caterpillar heavy equipment, and whose parent is ZSE-listed Zimplow, which has the controlling stake.

Zimplow is now buying out the 49% stake held by Barloworld in Barzem, which has suffered heavy financial losses from the termination of distributorships by Barloworld due to retrenchment costs.

“The board is following through on protecting shareholder value by acquiring Barloworld’s 49% shareholding in Barzem at a discount in line with the remedies provided in Barzem’s shareholder agreement,” Zimplow board chair, Godfrey Tsikai Manhambara, said.

Further worsening prospects for Zimplow is an “operating environment that remains unpredictable” despite “the growth being experienced in the mining and agricultural sectors”.

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