De Beers ex­ec­u­tive coughs up to res­cue Highveld Steel

CityPress - - Business -

The man putting up more than R440 mil­lion to buy a third of Evraz Highveld Steel and Vana­dium says he’ll need two years to turn the loss­mak­ing com­pany around.

Af­ter more than a year of mys­te­ri­ous cau­tion­ary an­nounce­ments about di­vest­ing from Highveld, the in­ter­na­tional steel and min­ing con­glom­er­ate Evraz an­nounced a deal this week.

Up to last month, it im­plied it would sell all of its 85% stake in Highveld, but has now an­nounced the sale of 34% to a shelf com­pany called Macrovest 147, which is wholly owned by Barend Petersen, the ex­ec­u­tive chair of De Beers Con­sol­i­dated Mines and direc­tor of its BEE part­ner, as well as An­glo Amer­i­can SA, Alexan­der Forbes and Curro Hold­ings. He will join Evraz’s board. Petersen has worked as a liq­uida­tor and busi­ness res­cue spe­cial­ist through his com­pany Sizwe Busi­ness Re­cov­ery, which shares Macrovest’s reg­is­tered ad­dress.

He says he is “cau­tiously con­fi­dent” the turn­around team he has se­cured can make a dif­fer­ence to Highveld in two years.

Petersen is pay­ing R298 mil­lion for the 34%, and ar­rang­ing re­fi­nanc­ing for half of a share­holder loan of roughly R309 mil­lion that Evraz gave Highveld when un­cer­tainty around its fu­ture made it tough to get bank fi­nanc­ing since 2011. To­gether, that amounts to roughly the go­ing share price of just less than R6.

Ac­cord­ing to Petersen, the process lead­ing to the deal had been “lengthy”.

Evraz’s ex­cur­sion in South Africa has been largely dis­as­trous. It bought the Highveld stake from An­glo Amer­i­can in 2007 for $650 mil­lion (R6.9 bil­lion). When Evraz first an­nounced it wanted to sell the stake, the shares were worth about R20 each. – De­wald van Rens­burg

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