Creditors vote in favour of rescue bid

CREDITORS of Evraz’s distressed unit in South Africa approved a bid by International Resources Limited (IRL) to buy the steel producer, saving it from bankruptcy. Creditors “voted in favour of the business rescue plan whereby the company avoided liquidation and remains in business”, Evraz Highveld Steel and Vanadium said yesterday. “In addition, the business rescue plan provides for a controlled wind down should the IRL offer not be consummated, which is significantly better than liquidation.” IRL was offering R350 million to settle creditors’ claims against Evraz Highveld and R20m as a payment to shareholders, bankruptcy protection officials said on the company’s website on September 16. The company, based in Hong Kong, would invest a further R4.1 billion in the business over the next three to four years to refurbish equipment and build a 200-megawatt cogeneration plant, raising steel output to 1.3 million tons annually, Evraz Highveld said. The offer also includes R150m to help Highveld repay financing made available by the Industrial Development Corporation, it said. Highveld was placed under business rescue proceedings, the local equivalent of bankruptcy protection, in April after a slump in demand for the metal and a surge in cheaper imports left it with insufficient funds. Evraz paid more than a combined $678m (R9bn) to buy Highveld in two transactions from Anglo American in 2006 and 2007. – Bloomberg

PAN AFRICAN RESOURCES