South Africa: According to Business Day Live, the resources of South Africa's Evraz Highveld Steel & Vanadium, which produces steel and slag, 'are almost depleted,' citing one of the group's business rescue practitioners (BRPs). This means possible liquidation, despite the government having said that it would 'do everything in its power' to ensure that the company remained operational.
The BRPs have until the middle of July 2015 to find a strategic investor to rescue it before Industrial Development Corporation (IDC) emergency funding of up to US$20.3m runs out. "Current trading conditions are extremely difficult. With conditions the way they are, it is going to be tough to rescue the company. Working capital is the number one priority," said BRP Piers Marsden of Matuson Associates. "Fundamentally, market conditions have worsened during the business rescue." He added that there were likely to be continuing operational losses at Evraz Highveld.
Marsden said that the BRPs had drawn US$4.06m of the US$20.3m pledged by the IDC. Seven potential bidders have been lined up, including four multinational groups and three potential black economic empowerment entities. Marsden said that the costs of proceeding to preferred bidder status would be US$10m, for an entity whose estimated US$2.44bn replacement cost has now been written down to only US$122m. The practitioners have not yet issued any retrenchment notices at the company. "We are engaging with unions to try and find solutions," said Marsden.
