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Report in terms of the Companies Act
EVRAZ Highveld Steel and Vanadium Limited
(Incorporated in the Republic of South Africa)
(Registration No: 1960/001900/06)
Share code: EHS ISIN: ZAE000146171
(“Highveld” or “the Company”)
REPORT IN TERMS OF SECTION 132(3)(a) OF THE COMPANIES ACT 71 OF 2008
Shareholders are advised that the Business Rescue Proceedings of the
Company have not been concluded within three months of the date of
commencement thereof and therefore, as required, the Business Rescue
Practitioners have prepared a further report in terms of Section 132
(3) (a) of the Companies Act 71 of 2008 (“Act”)(“the Report”) for
submission.
The Report was prepared by Piers Marsden and Daniel Terblanche, the
Joint Business Rescue Practitioners (“joint BRPs”) and should be read
in conjunction with the previous update reports, as well as the
Business Rescue Plan, which are all available on the Company’s website:
http://www.evrazhighveld.co.za/businessrescue.asp
1. Introduction
1.1. The business rescue proceedings of the Company have not been
concluded within three months of the date of commencement
thereof, and therefore this update report is being tabled in
terms of section 132(3)(a) of the Companies Act 71 of 2008
(“Act”).
1.2. It is important to read this report in conjunction with the
Business Rescue Plan (“Plan”) and previous update reports.
2. Business Rescue Process
2.1. Operational update:
2.1.1. Significant progress has been made in restructuring
the operations of the Company to improve the
Company’s ability to trade sustainably in the future.
2.1.2. The application to the International Trade
Administration Commission of South Africa for an
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increase in the rate of customs duty on structural
steel was granted.
2.1.3. The Training and Layoff Scheme in respect of the
Company’s employees was also approved.
2.2. Proposed transaction update:
2.2.1. Pursuant to the adoption of the Plan, the BRPs
commenced with implementing the proposed transaction
contemplated in the Plan.
2.2.2. In terms of the proposed transaction, the deadline
for the fulfilment or waiver of the conditions
precedent was 31 January 2016.
2.2.3. As at 31 January 2016, all of the conditions
precedent had not been fulfilled or waived.
Consequently the proposed transaction has failed.
2.2.4. In the circumstances, the BRPs are proceeding in
terms of Proposal 3, which contemplates the sale of
the business, or portions thereof, as a going
concern, alternatively the sale of the Company’s
assets.
2.2.5. The BRPs will convene a general meeting of Affected
Persons to advise Affected Persons of the process
that will be followed in terms of Proposal 3. Such
meeting will take place at 10h00 on 23 February 2016
at the address detailed below:
Elijah Mashiloane Hall
Evraz Highveld
Old Pretoria Road
Portion 93 of the Farm Schoongezicht 308 JS
eMalahleni (Witbank)
3. Proof of Claims
3.1. Creditors were required to submit their claims by
16 November 2015, being the final claims date provided for
in the Plan.
3.2. All claims are currently being reviewed by the BRPs and
management. A reconciliation process is underway in respect
of differences between the Company’s ledger and claim forms.
3.3. A mechanism for the resolution of disputed claims is
provided for in the Plan.
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4. South African Revenue Service (“SARS”)
The BRPs are waiting for SARS to provide detailed reasons for
reaching the decision to issue the additional assessments, as
provided for in Rule 6 of the Rules promulgated under section 103 of
the Tax Administration Act, 28 of 2011.
5. Update in Litigation Since Last Report
5.1. Court Proceedings instituted by East Metals AG (“EM”) and
Mastercroft S.A.R.L (“Mastercroft”) (“the main
application”):
5.1.1. SARS has filed its answering affidavit.
5.2. Urgent Court Proceedings instituted by EM and Mastercroft
(“the urgent interdict application”):
5.2.1. SARS has filed its answering affidavit.
5.3. Urgent Court Proceedings instituted by East Metals and
Mastercroft in respect of the Mapochs Mine (Pty) Ltd
(“Mapochs”) business rescue plan (“Mapochs urgent
application”)
5.3.1. The parties will now argue costs of the Mapochs
urgent application.
6. Suggested Way Forward
6.1. The BRPs will convene the general meeting of Affected
Persons and continue to implement the Plan in accordance
with Proposal 3.
7. Conclusion
The BRPs remain of the view that there is a reasonable prospect of
the Company being rescued.
eMalahleni
5 February 2016
J.P. Morgan Equities South Africa (Pty) Ltd.
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