Evraz Highveld Steel ex­pects to pay a higher div­i­dend to its cred­i­tors

The Star Early Edition - - NEWS - Di­neo Faku

BUSI­NESS Res­cue prac­ti­tion­ers at Evraz Highveld Steel and Vana­dium, South Africa’s sec­ond largest steel pro­ducer that went bust in 2015, ex­pect to pay a higher div­i­dend to its cred­i­tors in an­tic­i­pa­tion of the sale of its struc­tural mill.

Piers Mars­den, a busi­ness res­cue prac­ti­tioner at Ma­tu­son & As­so­ciates, told cred­i­tors dur­ing a meeting held in Sand­ton yes­ter­day that the div­i­dend pay­out had been re­vised to 15 cents from a pre­vi­ous 10c.

“The re­vised po­ten­tial div­i­dend is 15c based on our fore­casts. We an­tic­i­pate that the div­i­dend will change once we de­liver our strate­gic as­sets,” said Mars­den.

Asked how soon cred­i­tors would be paid, Mars­den said it would take up to two years.

“If we are able to sell the plate mill, within 18 to 24 months we will be in a po­si­tion to pay con­cur­rent cred­i­tors,” he said.

Highveld’s fi­nan­cial woes have had dire con­se­quences not only on its 1 800 em­ploy­ees, but on the econ­omy of eMalahleni in Mpumalanga, its sup­pli­ers and the com­mu­nity where un­em­ploy­ment is rife.

How­ever, the of­fi­cial restart of the heavy sec­tion steel mill in eMalahleni is a glim­mer of hope.

Highveld signed a con­tract man­u­fac­tur­ing agree­ment in De­cem­ber 2016 with ArcelorMit­tal South Africa (Amsa) through which Amsa will sup­ply blooms and slabs to Highveld for pro­cess­ing into heavy struc­tural steel.

The Highveld heavy sec­tion mill was restarted for pro­duc­tion in April 2017 and was ex­pected to ramp up to full pro­duc­tion by Novem­ber de­pend­ing on market de­mand.

“The struc­tural mill is the sin­gle most pos­i­tive devel­op­ment to come out of the busi­ness res­cue process,” said Mars­den.

Highveld started to de­liver 4 100 tons of prime prod­uct to Amsa in April and had the abil­ity to ramp up to 18 000 tons a month.

“For those who are sup­pli­ers in the mill should see some in­come be­ing gen­er­ated,” said Mars­den.

Highveld owes cred­i­tors R2.3 bil­lion, in­clud­ing em­ploy­ees, and the In­dus­trial Devel­op­ment Cor­po­ra­tion (IDC).

The com­pany was pri­ori­tis­ing pay­ing em­ploy­ees who have re­ceived R50 mil­lion out their R330m re­trench­ment pack­ages owed to them.

Highveld also owes the IDC R150m for a loan it re­ceived to fund its work­ing cap­i­tal re­quire­ments.

The com­pany be­gan pay­ing in­ter­est on the loan last year.

It also owed R680m of tax to Sars for the years 2007 and 2009. It was also re­garded as a se­rial en­vi­ron­ment of­fender with con­cerns on air emis­sions.

Evraz went into busi­ness res­cue in 2015 and sus­pended its list­ing on the JSE as a go­ing con­cern.

It sold its lime and some of its ti­ta­nium re­sources for R683.5m. It had al­ready re­ceived a R43m pay­ment with the bal­ance payable over a pe­riod of two to ten years.

Mars­den said the com­pany was ne­go­ti­at­ing the sale of the bal­ance of ti­ta­nium re­source, iron plant and the plate mill.

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