Tiso Blackstar subsidiary Robor is forced to go into liquidation
TISO BLACKSTAR said its 47.6 percent held subsidiary Robor Proprietary, a leading steel pipe and tube manufacturer of more than 90 years, was going into liquidation.
The company blamed the weak economic performance in the past three years, cheaper Chinese imports that eroded margins, delays in the signing of Independent Power Producer agreements, the “financial demise” of Eskom and a failure by the government to not extend import duty and tariff protection to downstream industries for the demise of Robor.
It said the imposition of import duties by the US on imported steel had plagued Robor’s sales of specialised steel pipe into the US oil and gas industry, which was previously a lucrative export market;
Regarding Eskom, Robor had suffered from the cessation of the 5 000 kilometre investment in additional power transmission lines, which Robor had invested for, extensively.
Robor had undertaken restructuring and cost-cutting in 2019, had concluded agreements to make sure its banking and trade credit insurance facilities remained in place, took measures to improve supply of coil and other raw materials and it had explored avenues to raise capital.
Tiso Blackstar were unable to commit further capital as it wished to divest of its non-core assets, of which its investment in Robor was one. “Regretfully, despite all efforts… Robor became unable to maintain the required levels of working capital and liquidity to retain its going concern status,” Tiso Blackstar said.
In June, Tiso agreed to sell its South African media, broadcasting and content business to Lebashe Investment Group for R800 million, excluding Gallo and its radio assets.
In January Robor was granted approval to merge with Macsteel’s tube and pipe business, a deal that had been necessitated by losses at Macsteel’s tube and pipe business for a number of years. The two companies were South Africa’s leading steel tube and pipe manufacturers. Robor said at the time their plants had been under-utilised for a number of years.
Tiso’s share price closed 5.88 percent lower at R3.20 on the JSE yesterday.