Embattled steel producer Evraz Highveld Steel and Vanadium has granted potential bidders a week’s extension for the submission of binding offers. An initial deadline of August 21 had been set, which has now been extended to August 28 at the request of the bidders.

The company as well as the associated Mapochs mine have been in business rescue since April and “several” potential bidders have paid the $10-million fee stipulated to gain access to the information required to complete a due diligence investigation.

While separate business rescue processes are under way for Evraz Highveld and Mapochs the bidders are expected to make a combined offer for both companies.

CEO Johan Burger tells Engineering News Online that the bidding process is one of several processes currently under way at the company, which is also engaging with its trade unions and with its creditors.

The company has indicated, through a Section 189 notice, that as many as 1 089 of its 2 240 employees could be retrenched and there have since been three meetings with employee representatives on the restructuring plan.

The business rescue practitioners are also finalising a plan for presentation to creditors, which are believed to be owed more than R1-billion. The plan, which will be voted on by creditors, is expected to propose a substantial write-down.

Steelmaking operations have been halted at the Mpumalanga facility and Burger reports that all outstanding semifinished material has been processed into saleable product. All remaining stocks will be sold over the next month or two.

Burger says the rescue plan still hinges on a combination of cost reductions, import protection, improved demand and the injection of fresh capital. Progress on all four aspects could result in a resumption of steelmaking, albeit at lower volumes.

There are strong indications that some import protection will be instituted in the foreseeable future, with President Jacob Zuma urging stakeholders to "work tirelessly together to save jobs in the iron and domestic steel industry sector". But Burger stresses that time is of the essence for Highveld, which requires improved volumes and prices if liquidation is to be avoided.