Recapitalization is the process of restructuring a company's debt and equity mixture, often to stabilize a company's capital structure. The process mainly involves the exchange of one form of financing for another, such as removing preferred shares from the company's capital structure and replacing them with bonds.[1]

Zimbabwe's Recapitalisation Projects

In 2019 the Government of Zimbabwe ordered the retendering of the National Railways of Zimbabwe recapitalisation project following the cancellation of the US$400 million deal last month. The deal, involving the Diaspora Infrastructure Development Group (DIDG) and Transnet was cancelled after DIDG failed to provide proof of funding for almost two years. As Zimbabwe moved ahead, a firm deal with a Russian company to provide wagons and locomotives was signed, with the expected arrival of the first 100 wagons having been in January 2020.[2]

The consortium indicated that it would slap the NRZ with a US$215 million lawsuit if it proceeded ahead with re-tendering the multi-million dollar NRZ recapitalisation transaction which Treasury was assessing before it was terminated by cabinet at the behest of Transport and Infrastructure Development minister Joel Biggie Matiza.[3]

In the year 2019 as well the Infrastructure Development Bank of Zimbabwe was looking at hiring a financial advisor to help raise as much as $1 billion in fresh capital through a partial privatisation. In a tender published in the Government gazette on 8 March 2019, the State-owned bank said the advisor was expected to provide advice and support for the implementation of the recapitalisation transaction in line with the Government’s privatisation policy.

The financial advisor was also to propose recapitalisation options and make appropriate recommendations, prepare the necessary transaction documentation to relevant stakeholders in canvassing foreign and local strategic institutional investors. The recapitalisation of IDBZ was to be done in phases; firstly, raising $500 million in the short to medium term and secondly; further capitalising the bank with the same amount in the long term. In 2018, the Government injected $150 million equity capital into the bank to help the institution discharge its mandate of providing long and medium term funding for infrastructure projects.

Zimbabwe had an estimated infrastructure backlog of $30 billion, according to the Africa Development Bank, after years of little investment into the sector. Between 2009 and 2016, the Government spent a total of only $2 billion on infrastructure projects, the amount analysts said should have been spent on an annual basis. The huge Debt Overhang and arrears to the multi-lateral financial institutions, including the International Monetary Fund and the World Bank also made it difficult for the country to raise long term capital critical for infrastructure projects.[4]

On 10 August 2020 the Confederation of Zimbabwe Miners (CZM) president Rangani Chauke has urged government to speedily recapitalise mining operations to achieve its ambitious US$12 billion mining economy by 2023. Chauke said the support they expected from government was in terms of secured loans with 90% of the loans being new plant and machinery while 10% could be channelled towards working capital.[5]

Fixed telecommunications operator, TelOne, says it is looking for investors to inject around US$300 million into the recapitalisation of the business. The company has concluded a network enhancement project, dubbed the National Broadband Project, which was funded by a US$98 million China Exim Bank loan facility. TelOne is one of 43 state-owned and parastatal companies that the Government has targeted for full or partial privatisation. In 2019, Treasury indicated that they were looking to raise US$300 million from the partial privatisation of both TelOne and NetOne (the state-run mobile telecommunications firm).[6]

In 2019, Zimbabwe’s central bank paid out $971 million without obtaining the necessary ministerial and parliamentary approvals, a parliamentary committee was told. By issuing Government Bonds in the form of Treasury bills to cover the costs of its commitments the bank boosted money supply and weakened the national currency.

According to documents presented in parliament, the Reserve Bank of Zimbabwe agreed to pay $840 million for agricultural supplies under the government’s Command Agriculture program, which supports small scale farmers. It also paid $51 million to Malaysia Airlines Bhd. to lease three planes that the country never got to use and $80 million to recapitalize the state-owned Zimbabwe Consolidated Diamond Company (ZCDC). The government also converted $366 million owed to Sakunda Holdings, a company owned by Kudakwashe Tagwirei, into government bonds, the Financial Times reported earlier. Sakunda’s accounts were frozen by the central bank.[7]

The Zimbabwean government agreed to take on the central bank's $1.35 billion of debt in 2013. Former RBZ governor Gideon Gono said he left office "a happy man" thanks to the government "finally summoning the courage to clean up the RBZ's balance sheet and, in the process, recapitalise it".[8]


  1. Will Kenton, [1], Investopedia, Published: 11 August, 2020, Accessed: 16 August, 2020
  2. Tendai Mugabe, [2], Chronicle, Published: 27 November, 2019, Accessed: 16 August, 2020
  3. Tinashe Kairiza, [3], Zimbabwe Independent, Published: 24 January, 2020, Accessed: 16 August, 2020
  4. [4], The Herald, Published: 12 March, 2019, Accessed: 16 August, 2020
  5. Stephen Chadenga, [5], Newsday, Published: 10 August, 2020, Accessed: 16 August, 2020
  6. [6], The Zimbabwe Mail, Published: 20 July, 2020, Accessed: 16 July, 2020
  7. Desmond Kumbuka, [7], Bloomberg, Published: 26 September, 2019, Accessed: 16 August, 2020
  8. [8], Central Banking, Published: 2 December, 2013, Accessed: 16 August, 2020