Steel major Evraz Highveld files for business rescue

14th April 2015

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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Vertically integrated steel and vanadium slag producer Evraz Highveld Steel and Vanadium has initiated voluntary business rescue proceedings, citing an inability to meet its short-term obligations as a result of historical operating difficulties and sustained financial losses within a capital-constrained operating environment.

The decision came despite the recent implementation of a turnaround plan that looked to improve the steelmaker’s fragile financial position, which had been negatively impacted by weakened global steel and vanadium markets and a “severe” reduction in domestic steel demand.

“The board believes that the implementation of voluntary business rescue will afford the business practitioner the opportunity to consider the continued implementation of the turnaround plan and successfully re-establish the company,” it said in a statement on Tuesday, adding that it had already appointed joint business rescue practitioners.

Trading of Evraz shares on the JSE had also been suspended.

The company further advised that a deal between parent company Evraz and empowerment group Macrovest, which would have seen Macrovest acquiring 34% of the steel subsidiary, had lapsed as a result of the announcement.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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