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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 to read this report in conjunction with the
Business Rescue Plan (“Plan”) and previous update reports.
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2. Business Rescue Process
2.1. Pursuant to the adoption of the Plan, the joint BRPs have
commenced with the preparation of the transaction documents
in terms of the proposed transaction contemplated in the
Plan.
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 joint 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.
4. South African Revenue Service (“SARS”)
4.1. On 18 November 2015, the Company received a finalisation of
audit letter from SARS in terms whereof SARS advised that it
had finalised its audit in respect of the Company’s income
tax for the 2007 to 2009 tax period. On 19 November 2015,
the Company received a copy of the assessments issued by
SARS in respect of the aforesaid tax period.
4.2. In terms of the additional assessments, the following
amounts are payable
Net Amount Payable
2007 Year of R252 994 295.35
Assessment
2008 Year of R383 520 469.20
Assessment
2009 Year of R43 346 526.45
Assessment
Total R679 861 291.00
4.3. The joint BRPs have formally requested SARS to provide
detailed reasons for reaching the decision to issue the
aforesaid additional assessments, as provided for in Rule 6
of the Rules promulgated under section 103 of the Tax
Administration Act, 28 of 2011.
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5. Litigation
5.1. Court Proceedings instituted by East Metals AG (“EM”) and
Mastercroft S.A.R.L (“Mastercroft”) (“the main
application”):
5.1.1. As advised in the previous report, 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.
5.1.2. The Company and the joint BRPs have opposed the main
application and have filed an answering affidavit.
5.1.3. The main application has also been opposed by the IDC, SARS
and NUMSA.
5.1.4. Although the Economic Development Department (“EDD”) is not
a party to these litigations, it has expressed its
opposition to the main application.
5.2. Urgent Court Proceedings instituted by EM and Mastercroft
(“the urgent interdict application”):
5.2.1. As advised in the previous report, on or about 26 October
2015, EM and Mastercroft instituted an urgent application in
terms of which they seek inter alia to interdict and
restrain the Company and the BRPs from implementing the Plan
in respect of the Company, pending the final determination
of the main application.
5.2.2. The Company and the joint BRPs opposed the urgent interdict
application and filed an answering affidavit. EM and
Mastercroft have filed a replying affidavit to the aforesaid
answering affidavit.
5.2.3. The urgent interdict application has also been opposed by
the IDC, SARS and NUMSA. IDC has filed its answering
affidavit.
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5.3. Urgent Court Proceedings instituted by EM and Mastercroft
(“the substituted service application”):
5.3.1. As advised in the previous report, on or about 2 November
2015, EM and Mastercroft instituted a further urgent
application in terms of which they sought inter alia leave
of the Court to serve the main application by way of
substituted service.
5.3.2. The joint BRPs filed an answering affidavit whereafter East
Metals and Mastercroft filed a replying affidavit.
5.3.3. At the hearing on 17 November 2015, the parties agreed to an
order setting out the grounds upon which East Metals and
Mastercroft are required to effect substituted service of
the main application and urgent interdict application on
affected persons.
5.4. Urgent Court Proceedings instituted by East Metals and
Mastercroft in respect of the Mapochs Mine (Pty) Ltd
(“Mapochs”) business rescue plan (“Mapochs urgent
application”)
5.4.1. On 30 November 2015, East Metals and Mastercroft instituted
further urgent proceedings in terms of which they sought to
inter alia:
- Interdict the Company and joint BRPs from giving effect
to, furthering or facilitating the proposed transaction
contemplated in the business rescue plan of Mapochs; and
- Interdict the meeting convened in terms of section 151 of
the Act in respect of Mapochs.
5.4.2. The Mapochs urgent application was opposed by the Company,
the joint BRPs and Mapochs’ joint business rescue
practitioners. Answering affidavits were filed by the
aforesaid parties.
5.4.3. SARS further applied for leave to intervene to oppose the
Mapochs urgent application.
5.4.4. At the hearing on 30 November 2015, East Metals and
Mastercroft removed the matter from the urgent roll.
5.4.5. The parties will now argue costs of the Mapochs urgent
application.
6. Suggested Way Forward
6.1. The BRPs will continue to implement the Plan.
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7. Conclusion
The BRPs remain of the view that there is a reasonable prospect of
the Company being rescued.
eMalahleni
6 January 2016
J.P. Morgan Equities South Africa (Pty) Ltd.
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