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Further report in terms of Section 132(3)(a) of the Companies Act 71 OF 2008
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”)
FURTHER REPORT IN TERMS OF SECTION 132(3)(a) OF THE COMPANIES ACT 71 OF
2008
Shareholders are advised that despite efforts to complete the Business
Rescue Proceedings of the Company within three months of the date of
commencement thereof, the proceedings have not been concluded and
therefore, as required, the Business Rescue Practitioners have prepared
a second 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 report, for actions taken during
subsequent to the published Business Rescue Plan, which are all
available on the Company’s website:
http://www.evrazhighveld.co.za/businessrescue.asp
The Report
The content of this Report is as follows:
Report to the Companies and Intellectual Property Commission and to all
Affected Persons in terms of Section 132 (3) (a) of the Companies Act
71 of 2008.
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 that this report is read in conjunction with
the Business Rescue Plan (“Plan”).
2. Business Rescue Process
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2.1. The Plan was published on 15 September 2015.
2.2. The meeting to consider the Plan, as contemplated in terms
of Section 151 of the Act (“the s151 Meeting”), was convened
and held on 28 September 2015. At the s151 Meeting, the
majority of creditors voted in favour of the s151 Meeting
being adjourned for 2 weeks.
2.3. During the adjournment, a general meeting of affected
persons was convened and held on 8 October 2015.
2.4. The s151 Meeting was reconvened and held on 13 October 2015.
3. The s151 Meeting
3.1. Amendments to the Plan:
3.1.1. Five amendments were proposed and voted on at the
s151 Meeting, with no objections noted. The
amendments can be found on the Company’s website or by
clicking on the following link:
http://www.evrazhighveld.co.za/BusinessRescue/Evraz%20
Highveld%20Steel%20-%20Business%20Rescue%20Plan%20-
%20S151%20%20Amendments%20&%20Results%20of%20Meeting.p
df
3.2. Voting
3.2.1. The results of the votes are as follows:
Number Total % of % of Result
of Value of Votes Votes
Votes Votes Cast in Against
Favour
All Creditors 357 2 371 453 79% 21% Adopted
398
Independent 356 1 992 614 94% 6% Adopted
Creditors 917
3.2.2. The Plan was accordingly adopted. A Plan that has
been adopted is binding on the Company and on each of
the creditors of the Company, whether or not such
person –
a) was present at the meeting;
b) voted in favour of the adoption of the Plan; or
c) in the case of creditors, had proven their claims
against the Company.
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4. Implementation of the Plan: The Proposed Transaction
4.1. The joint BRPs announced the successful bidder in terms of
the sales process during September 2015.
4.2. The Plan provides for the successful bidder’s offer and the
BRPs furnished affected persons with an update in regard to
same at the s151 Meeting.
4.3. Preparation of the transaction documents has commenced.
5. Proof of Claims
5.1. All claims are currently being reviewed by the joint BRPs
and management. A reconciliation process is underway in
respect of differences between the Company’s ledger and
claim forms.
5.2. A mechanism for the resolution of disputed claims is
provided for in the Plan.
5.3. Creditors are encouraged to submit their claims before the
final deadline of 16 November 2015.
6. Litigation
6.1. Court Proceedings instituted by Global Renewable Energy
Limited (“GRE”):
6.1.1. On 23 September 2015, one of the unsuccessful bidders
in the sales process, GRE, applied to the High Court
to urgently interdict the BRPs from proceeding with
the s151 Meeting convened for 28 September 2015. The
BRPs opposed the urgent application and filed an
answering affidavit.
6.1.2. On 25 September 2015, the presiding judge held that
the urgent application was an abuse of the court
process and struck the urgent application from the
roll due to lack of urgency.
6.2. Court Proceedings instituted by, inter alia, GRE and Bruno
Quatro Engineering (in business rescue) (“Bruno”) as the
intervening applicants:
6.2.1. On 2 October 2015, GRE furnished the BRPs with an
amended notice of motion and replying affidavit in the
aforesaid application in terms of which GRE sought
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urgently to inter alia interdict the adjourned s151
Meeting convened for 13 October 2015.
6.2.2. Furthermore, on 2 October 2015, Bruno and its
business rescue practitioner instituted urgent
proceedings in terms of which they sought to inter
alia intervene in the application instituted by GRE
and interdict the BRPs from introducing the Plan for
consideration by creditors.
6.2.3. The BRPs opposed the applications and filed
affidavits before the hearing of the applications.
6.2.4. On 9 October 2015, the presiding judge held inter
alia that the applications were once again an abuse of
the court process and were struck from the roll due to
a lack of urgency.
6.2.5. The presiding judge accordingly awarded costs to the
Company and the BRPs, including the costs of two
counsel.
6.3. Court Proceedings instituted by East Metals AG (“EM”) and
Mastercroft S.A.R.L (“Mastercroft”) (“the main
application”):
6.3.1. On or about 21 October 2015, EM and Mastercroft
instituted proceedings in terms of which they seek
inter alia to declare:
the Plan as invalid;
a) that the vote which took place at the s151
Meeting on 13 October 2015, in terms of the
which the Plan was adopted, as invalid and to
have the vote set aside; and
b) that the agreement on the remuneration of the
joint BRPs as provided for in the Plan as
invalid and set aside.
6.3.2. The Company and the joint BRPs have opposed the main
application and will be filing their answering
affidavit in due course.
6.4. Court Proceedings instituted by EM and Mastercroft (“the
urgent interdict application”):
6.4.1. On or about 26 October 2015, EM and Mastecroft
instituted an urgent application in terms of which
they seek inter alia to interdict and restrain the
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Company and the BRPs from implementing the Plan in
respect of the Company, pending the final
determination of the main application.
6.4.2. The Company and the joint BRPs have opposed the
urgent interdict application and have filed an
answering affidavit.
6.4.3. Further updates will be furnished.
6.5. Court Proceedings instituted by EM and Mastercroft (“the
substituted service application”):
6.5.1. On or about 2 November 2015, EM and Mastecroft
instituted a further urgent application in terms of
which they seek inter alia leave of the Court to serve
the main application by way of substituted service.
6.5.2. The Company and the joint BRPs have opposed the
substituted service application and have filed an
answering affidavit.
6.5.3. Further updates will be furnished.
7. Suggested Way Forward
7.1. The BRPs will continue to oppose the aforesaid applications
and implement the Plan.
8. Conclusion
The BRPs remain of the view that there is a reasonable prospect of
the Company being rescued.
eMalahleni
10 November 2015
J.P. Morgan Equities South Africa (Pty) Ltd.
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