PSV in rescue after rights issue snub

The board of listed industrial company PSV Holdings, which provides steel, control valves and engineering linings, has put the financially distressed company into business rescue.

This belies the company’s optimism in the year to February 28 2019 that recent efforts to turn the company’s fortunes around were paying off.

PSV received a boost when black-owned DNG Energy, a gas company with operations in SA, Ghana, Nigeria and Mozambique, bought a 25.6% interest in the company, boosting its empowerment credentials.

PSV said in February it was monitoring its financial position and would be in talks with lenders and creditors.

However, “after careful consideration, the board of PSV has resolved that the company is in financial distress and has been put into business rescue.

A business rescue practitioner will be appointed in due course,” the company said in a statement. Business rescue is a form of bankruptcy protection aimed at rehabilitating a financially distressed company.

PSV said Standard Bank has attached the customer account of its subsidiary PSV Industrial in terms of an arrangement entered into in 2015.

“Accordingly, the directors of PSV Industrial, a wholly owned subsidiary of PSV, have also resolved to place PSV Industrial into business rescue.”

The business rescue proceedings come after the group’s shareholders rejected a proposed rights offer in 2019.

The issue of new shares was among the steps to recapitalise the struggling company, which has taken strain from the weak SA economy.

The company, which has a market capitalisation of R94m, has been rocked by resignations of executives since 2018.

These include former CEO Abilio da Silva, who resigned in November 2018, and former CFO Tony Dreisenstock, who left in February 2019.