De Beers executive coughs up to rescue Highveld Steel
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