EVRAZ HIGHVELD STEEL & VANADIUM LTD - Report in terms of S 132(3)(a) of the Companies Act No.71 of 2008

Report in terms of S 132(3)(a) of the Companies Act No.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”)



REPORT IN TERMS OF S 132(3)(a) OF THE COMPANIES ACT NO.71 OF 2008

Shareholders are advised that the Joint Business Rescue Practitioners
have prepared a business rescue update report for January 2017 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.



The Report


The content of the Report is as follows:

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. Update on Business Rescue Proceedings
   Structural Mill:

   2.1.      The contract manufacturing and option to buy agreement
             between the Company and ArcelorMittal South Africa Limited
             was concluded during December 2016.
   2.2.      The Company has commenced with the refurbishment of the
             Structural Mill, which is expected to be completed by April
             2017.
   2.3.      Once the refurbishment has been completed, the Structural
             Mill assets will be sold to a wholly owned subsidiary of the



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           Company (please refer to the last presentation to the general
           meeting of affected persons which details the structure.)
   2.4.    It is expected that the Structural Mill will commence
           production immediately thereafter.

   Sale of Process Stockpiles

   2.5.    The Company has concluded the sale of 10 million tons (out of
           approximately 44 million tons) of the Elkem stockpile. A non-
           refundable deposit is payable within 7 days.
   2.6.    The sale proceeds will be received on a monthly take-or-pay
           basis.

   Other Strategic Assets

   2.7.    The joint BRPs continue to engage with buyers on several of
           the Company’s strategic assets.

   Employee Payments:

   2.8.    Employees have been paid approximately 11% (R30 896 283) of
           the total amount owed to them. The last payment to employees
           was made on 15 December 2016.

   Update Meeting:

   2.9.   A further general meeting of affected persons has been
          convened for 10h00 on 24 February 2017 at the offices of
          Edward Nathan Sonnenbergs Inc., 150 West Street, Sandton, to
          provide affected persons with an update on the business rescue
          proceedings and to discuss the way forward.


3. Proof of Claims
   3.1.     The claims submission period has closed.
   3.2.   Creditors are still being informed on a) whether their claim
          has been accepted and b) the quantum of such claim.
   3.3.   Please refer any questions or queries relating to your claim
          to evrazhighveld@matusonassociates.co.za




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4. Litigation
   4.1    The joint BRPs have received the answering affidavit and
          counter-application of Air Liquide (Pty) Limited, which will
          be made available on the Company’s website.   Air Liquide has
          further advised of its intention to bring a joinder
          application and application for substituted service.
   4.1.   The joint BRPs have further instituted action proceedings
          against Air Liquide in respect of the late start-up of Air
          Liquide’s plant in terms of the supply agreement concluded
          between Air Liquide and the Company.   Air Liquide has filed
          its notice of intention to defend.   The relevant notice to
          affected persons will be published in due course.
   4.2.   Affected Persons will be advised of further updates.


5. Suggested Way Forward

  In terms of the Plan, the business rescue is proceeding in accordance
  with Proposal 3, i.e. the wind-down of the Company.

6. Conclusion
   It is the joint BRPs’ view that Proposal 3 will result in a better
   outcome for all affected persons than a liquidation.


eMalahleni
27 January 2017
J.P. Morgan Equities South Africa (Pty) Ltd.
Sponsor




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