South Africa: Evraz Highveld Steel and Vanadium has issued a proposed restructuring notice in terms of Section 189 that could see it potentially cutting half of its workforce, according to Engineering News.
The group, which initiated voluntary business rescue proceedings in April 2015, will now enter a 60-day Commission for Conciliation, Mediation and Arbitration-facilitated consultation process with employees and trade unions.
Responding to the announcement, trade union Solidarity, which claims to represent around 400 of Evraz Highveld's 2242 employees, said that it would participate in the consultation process to mitigate the impact on its members. The union said it had already sent a letter to South Africa's largest commercial banks requesting them to 'show consideration' for the financial difficulties currently being experienced by Evraz employees. It further called for, an urgent industry-wide intervention in the metals industry to avoid the retrenchment of 'thousands of workers.'
"In the coming weeks, the trade union will hold probing discussions with various players in the metals industry to explore solutions for the crises currently experienced in the industry. Among other things, we will propose that the local manufacturing sector and construction industry make use only of domestic steel to support the local steel industry. In addition, we will also propose that the steel industry should be exempted from winter electricity tariffs while the industry is recovering," said Solidarity deputy general secretary Johan Kruger.
Evraz confirmed that it had received a number of offers to invest in the company, with prospective bidders required to provide the necessary guarantees by 27 July 2015 to proceed to the next stage of the bidding process. The vertically integrated steel and vanadium slag producer cited its inability to meet its short-term obligations as a result of historical operating difficulties and sustained financial losses within a capital-constrained operating environment as the catalysts for it entering business rescue proceedings earlier in 2015.
