PSV considers clawback offer with DNG as part of restructuring strategy

26th February 2020 By: Marleny Arnoldi - Creamer Media Online Writer

AltX-listed industrial engineering group PSV Holdings on Wednesday announced that its board was considering a turnaround strategy for the business.

The turnaround strategy includes a potential clawback offer whereby liquefied natural gas infrastructure provider DNG Energy Proprietary will initially subscribe for shares in the company, as well as buy the Turbo Agencies business, based in Botswana.

This follows after the board was unable to secure shareholder approval at a meeting in October last year to issue more than 30% new shares in anticipation of a rights offer.

The board then set out to find alternative means of recapitalising, restructuring and normalising the operations of the company.

The proposed clawback offer and terms still have to be determined and investigated by PSV’s board and may also require shareholder approval. This, in turn, will need to be canvassed with the larger shareholders to ensure costs are not incurred unnecessarily.

The company believes the turnaround strategy will result in the creditors and stakeholders being put in a better position than liquidating the business or placing it into business rescue.

Turbo Agencies has been deemed noncore to the operations of the company and has a negative net asset value.

To this end, DNG has agreed to acquire 100% of Turbo Agencies. The disposal will be deemed to be a related party transaction as a consequence of Aldworth Mbalati being a director of both DNG and PSV, as well as DNG holding a 25.6% shareholding in PSV.

PSV made a loss of nearly R26-million in the year ended June 30, 2019.

PSV in its 2019 yearly report said the company had endured an extremely challenging 12 months, with substantial financial losses against a background of difficult trading conditions.