Johannesburg - Two companies are battling it out in the Durban Regional Court for the right to acquire the liquidated Tata Steel KwaZulu-Natal (TSKZN). TSKZN was liquidated last July after a business rescue attempt had failed. The plant was subsequently shut.
The Richards Bay-based steel company has attracted the attention of two suitors – Pre-Con Engineers and Plexi Africa.
Plexi Africa put in an offer of R90 million to buy TSKZN and Pre-Con made an offer of R95m.
Tata Steel holds a 90 percent stake in TSKZN and the balance is held by Tata Africa Holdings.
Higher electricity prices and shut-downs caused by load shedding, particularly last winter, have hurt the company in recent years.
TSKZN produced 150 000 tons of high-carbon ferrochrome a year from locally supplied ores and it was established in 2006. The ferrochrome, used in the manufacture of stainless steel, is exported to Asia, Europe and the US.
The court process provides some hope for 195 workers who faced an uncertain future since the plant was closed last year.
Regional organiser for the National Union of Metalworkers of South Africa, Henry Nyende, said:
“The company has kept their part of the deal and paid our members despite it being in trouble. We understand that once the dispute is settled in court we will have a new buyer and the workers can go back to work. We can hope for speedy resolution.”
The matter was first heard in court on Friday and is set to continue this week.
Tata Steel has also faced challenges outside South Africa.
At the end of last month, The Times of India reported that nine years after it had acquired Corus to become Europe’s second-largest steelmaker, Tata Steel had announced plans to sell off the UK business as the company had battled to control its “deteriorating financial performance”.
BUSINESS REPORT