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Voluntary Liquidation Of Robor Proprietary Limited
TISO BLACKSTAR GROUP SE
(Incorporated in England and Wales)
(Registration number SE000110)
(Registered as an external company with limited liability in the Republic of South Africa under
registration number 2011/008274/10)
JSE share code: TBG ISIN: GB00BF37LF46
("Tiso Blackstar" or “the Company”)
VOLUNTARY LIQUIDATION OF ROBOR PROPRIETARY LIMITED
Shareholders are hereby advised that the board of directors and shareholders of Robor Proprietary
Limited (“Robor”) have resolved to place Robor into voluntary liquidation, which liquidation has become
effective.
The Company holds 47,61% of the issued share capital in Robor and is classed as a non-core
investment of the Company. Robor operates in the South African steel manufacturing sector and has a
history spanning over 90 years.
The decline of the South African economy over the past three years, the margin-eroding effect of
cheaper Chinese imports, delays in the signing of Independent Power Producer agreements with the
South African Government and the well-publicised financial demise of Eskom have caused systemic
harm to both production and revenue generation in South Africa’s steel tube and pipe manufacturing
sector.
In addition to the above systemic issues in the sector, the progressive demise of the Robor’s business
has been exacerbated by the following factors:
• Insufficient volumes going through the Robor factory, an overhang of excess production
capacity in South Africa after 2010 and the pervasive effect of cheaper imports from the East;
• The imposition of import duties by the United States of America on imported steel, which
plagued Robor’s sales of specialised steel pipe into the US oil and gas industry, previously a
lucrative export market;
• The effective cessation of Eskom’s planned 5,000km investment in additional power
transmission lines, an initiative in which Robor had invested extensively; and
• The South African Government not extending import duty and tariff protection to downstream
industries, thereby exposing steel fabricators to huge margin erosion to compete with imported
steel-manufactured goods.
Robor’s infrastructure and business is purpose built for high volume production of up to 20,000 tons per
month. During the past 18 months, Robor witnessed significantly declining tonnage throughputs thus
making it increasingly difficult for Robor to remain viably operational, despite the concerted efforts of
management to address this.
Under the leadership of the Company, Robor undertook significant restructuring and cost-cutting
initiatives during 2019, aimed at mitigating declining revenues and tonnage throughput. These initiatives
were wholly supported by Robor’s principle credit providers amidst an increasingly challenging lending
environment. As part of this restructuring, Robor negotiated and concluded agreements aimed at
ensuring a continuation of existing banking and trade credit insurance facilities and improved supply of
coil and other raw materials.
However, these facilities were dependent on Robor maintaining critical levels of stock, which, despite
numerous meetings with suppliers and trade credit insurers, Robor was unable to do.
In addition, the Company explored numerous avenues to raise additional capital for Robor including
selling Robor as a going concern, merging with a competitor and a break-up and sale of individual
Robor group companies. Tiso Blackstar and its shareholders were unable to commit any further capital
or support to Robor beyond the Company’s current exposure, particularly in view of its well-publicised
intention to divest of its non-core assets, of which its investment in Robor was one.
Regretfully, despite all efforts to right-size Robor’s operations, to procure additional tonnages for
Robor’s world-class manufacturing facility and to source additional capital, Robor became increasingly
unable to maintain the required levels of working capital and liquidity to retain its going concern status.
Due to the abovementioned issues, Robor’s directors and shareholders unanimously passed
resolutions for the winding-up of Robor in terms of Sections 349 and 351 of the Companies Act 71 of
2008 of South Africa. These resolutions came into effect on 19 September 2019, being the date on
which they were registered by Companies and Intellectual Property Commission. On 26 September
2019 the South Gauteng High Court granted the order of liquidation of Robor.
As security for part of Robor’s working capital banking facility, Tiso Blackstar has a R110 million
exposure to Robor in the form of a guarantee provided to Robor’s funders. This excussive guarantee
ranks behind the other assets in the Robor’s collateral pool and can only be called upon in the event of
a shortfall in the realisation by Robor’s funder of the collateral it holds against Robor. An independent
valuation has been performed by a third party expert on the realisable value of the Robor assets held
in the collateral pool and has determined that there are sufficient realisable proceeds to settle Robor’s
obligation to its funder. Accordingly, it is not anticipated that this Tiso Blackstar guarantee will be called
upon.
Accordingly, the Company has fully impaired its investment in Robor as the Company believes any
subsequent recovery of such investment to be unlikely.
London
2 October 2019
Sponsor to Tiso Blackstar
PSG Capital
Date: 02/10/2019 07:05:00
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