Tendai Rwodzi, a minority shareholder in Zimbabwean miner RioZim Ltd., has approached the High Court to block a proposed $35 million sale of Renco Gold Mine, challenging a transaction the company says is needed to repay loans, settle creditors and stabilize operations at its Cam & Motor gold mine.

The legal challenge comes after RioZim issued a notice in late September seeking shareholder approval for the disposal of Renco as a going concern to an unrelated third-party buyer.

The proposed sale is the sole item of special business on the agenda for the company’s extraordinary general meeting.

A sale under legal challenge

RioZim’s board has described the disposal as a critical part of its balance sheet restructuring strategy, citing net current liabilities of about $51 million.

The company is seeking to generate cash, reduce financial pressure and direct resources toward stabilizing its wider mining operations.

Rwodzi argues in court papers that the proposed transaction is unlawful because RioZim is subject to corporate rescue proceedings.

The proceedings were initiated through a court application filed in April, seeking protection for the company while a plan is developed to restore financial stability and address creditor claims.

Corporate rescue at the center

The shareholder contends that filing for corporate rescue triggers legal protections intended to prevent a company’s assets from being disposed of outside the applicable process.

His application seeks to stop the meeting from approving the transaction while the dispute over the proposed sale and its legality remains before the court.

The proposed deal covers the transfer of Renco’s mining lease, special grant, associated mining claims, land, buildings, machinery, equipment and operating infrastructure.

The purchaser would also assume specified liabilities valued at approximately $1.6 million, according to the transaction details provided by the company.

RioZim faces financial pressure

RioZim operates across gold, base metals, chrome, diamonds and energy through a portfolio of mining and industrial assets. Founded in 1956 as Rio Tinto Southern Rhodesia Ltd., the company became fully independent in 2004 and is listed on the Zimbabwe Stock Exchange.

Its operating portfolio includes Renco Gold Mine in southeastern Zimbabwe, Cam & Motor in Kadoma, Dalny Mine in Chakari and the Empress Nickel Refinery near Kadoma.

The group also holds a 50% interest in Sengwa Colliery and a 22% stake in Murowa Diamonds, while pursuing opportunities in chrome mining and smelting.

The stakes for shareholders

The dispute puts RioZim’s debt-reduction plans against questions over how its assets can be managed during corporate rescue.

A successful sale could provide cash to address creditor obligations, but the court challenge threatens to complicate the company’s efforts to restructure its balance sheet and stabilize its operations.

Rwodzi, a corporate activist and minority shareholder, is seeking judicial intervention before shareholders decide on the transaction.

The outcome could shape the next steps for RioZim as it navigates its financial obligations, creditor interests and the legal constraints surrounding the proposed disposal of one of its gold-producing assets.