DIDG scheme targets investors abroad
THE Diaspora Infrastructure Development Group (DIDG) has appointed Imara Corporate Finance and EY South Africa as its advisors to set up the Collective Investment Scheme meant to allow other Zimbabweans living abroad to inject capital into the firm, a company official has said.
BY MTHANDAZO NYONI
The DIDG-Transnet Consortium, which won the $400 million recapitalisation tender for the National Railways of Zimbabwe, said they were pooling together offshore funds to allow other Zimbabweans living abroad to inject capital into the firm.
“We are working on the Collective Investment Scheme (CIS) and believe this is a 6-9 month process. We have appointed Imara Corporate Finance and EY (South Africa) as the advisors to run with the setting up of this scheme in Mauritius,” DIDG executive chairman, Donovan Chimhandamba, told NewsDay in emailed responses.
“Though this scheme will be anchored by institutional investors such as an infrastructure fund, the CIS is designed to allow the broader Zimbabweans in diaspora to subscribe for participating units from the various jurisdictions they preside,” he said.
He said the proceeds of the subscriptions would be used as equity or quasi equity in the underlying infrastructure projects.
“It is another way of achieving what diaspora bonds would have achieved but in this case we are trying to make the instrument more equity than pure debt,” he said.
With regards to NRZ, Chimhandamba said the due diligence was near complete and they had begun the process of updating all business models based on the information verified during the due diligence.
“We are seeing a stronger business case than we originally thought of which makes it easier to conclude the next set of agreements and financing terms. While this is happening, DIDG and Transnet continue to provide for and support an interim solution to NRZ to ensure NRZ is capable of servicing the growing demand,” he said.
In terms of diversification, he said DIDG’s strategy was to ensure that the value chain industries that support their main projects were recapitalised so that they do not rely on foreign sourced goods and services.
“So in terms of rail value chain, we are studying all critical industries that used to service NRZ. These include the concrete product producers, engineering facilities that historically carried out rolling stock refurbishment, building and maintenance of private branch lines among others. As DIDG, we will grow with our value chain,” he said.