AltX-listed steel retailer Alert Steel has agreed to undertake a clawback offer of 48-million shares at 200c a share to raise R96-million, as part of the beleaguered company’s turnaround strategy to return to profitability.

In terms of a heads of agreement, the offer would be underwritten by Southern Palace 265 on the basis that the recently acquired loan claim of Southern Palace and AKM Sons Property Trust against Alert would be converted into 37.5-million newly issued shares in Alert at an aggregate value of R75-million.

The remaining R21-million would be paid in cash upon subscribing for the balance of 10.5-million shares.

Alert also agreed to sell its shares in Aquarella Investments 454, which owned the office building the company operated out of, in East Lynne, Pretoria, to AKM for R1.

Alert agreed to waive its loans against Aquarella and to rent the property from Aquarella, subject to the entering into of a formal lease agreement.

Further, as per the agreement, Southern Palace undertook to lend on or before February 12, an amount of R10-million to Alert, free of interest. The loan would have to be repaid within 30 calendar days of demand.

Should the conditions precedent be fulfilled, and up to the fulfilment date, Alert agreed to not place itself or its subsidiaries in liquidation or business rescue, nor would it encourage other parties to take steps in pursuance of liquidation or business rescue against Alert or its subsidiaries.

Meanwhile, Alert’s nonexecutive chairperson Malcolm McCulloch had resigned with effect from February 9 and would be replaced by Mitesh Patel from February 11.

This followed the exit of the company’s CEO Johan du Toit, announced last week, who would be replaced by current international wholesaler Metro Cash & Carry CEO Peter Dodson, also with effect on February 11.

Other new additions to the board of directors was Alert founder and former CEO Wynand Schalekamp, who would take up the position as steel operations executive director, as well as chartered accountant Afzal Loonat, who had been appointed as a nonexecutive director.