Delta discontinuation progresses
JOHANNESBURG (miningweekly.com) – JSE-listed electrolytic manganese dioxide (EMD) manufacturer and supplier Delta EMD’s dismantling and shedding of assets was now well under way as the company announced the conclusion of the first retrenchments.
The company in March said it would discontinue its operations and sell its assets on the back of the declining state of the global EMD market and the company’s deteriorating financial performance.
“Good progress has been made with many of the activities required by the discontinuation programme,” Delta said in a trading update for the half-year to June.
This included the conversion of the work-in-process and the final production of EMD.
The retrenchment of the first 82 employees, representing one-half of all Nelspruit-based employees, was completed by June 27, with payment of their retrenchment packages to be completed on July 10.
The total value of the severance packages for all 160 employees at the group’s Nelspruit operations was estimated at about R40-million.
Further, the marketing of assets held for sale had started.
Following the decision to discontinue the business, Delta accounted for R78.5-million of expenses relating to the discontinuation in the period ended June 27.
This included provisions for inventory impairment of R30-million, retrenchment fees, retention incentives of R5-million and use of external advisers of R3.5-million.
The company expected to post an after-tax loss of between R96-million and R99-million during the interim period to June, compared with after-tax earnings of R9.3-million registered in the prior corresponding period the year before.
Delta expected to report a loss a share and headline loss a share of between 195c and 199c in the interim period under review, compared with earnings and headline earnings a share of 18.9c achieved in the first six months of last year.
Delta would publish its interim results on August 22.
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