Johannesburg - Evraz Highveld’s Mapochs mine is likely to be rescued, its business rescue practitioners said in an update to shareholders on Wednesday.
Evraz had been sourcing magnetite iron ore from the mine, which is located near Roossenekal, 140 kilometres north east from Witbank (Emalahleni) before it and its subsidiaries went into business rescue.
Business rescue allows companies to avoid having to liquidate and provides them protection from creditors. In this case, the process will afford Highveld a way to consider whether it should continue implementing a turnaround plan and successfully re-establish itself.
Evraz Highveld is currently the majority shareholder in the mine, which filed for business rescue in April. At the time, Evraz explained it did not have sufficient funding to meet its financial obligations for the short-term. “This is as a result of historical operational and financial difficulties and extremely difficult steel and vanadium market conditions.”
On Wednesday, the practitioners issued an update to the process around Mapochs and noted the business rescue proceedings, which were set to be complete within three months of starting, have not been concluded.
The practitioners, John Lightfoot (Matuson & Associates) and John Evans (RS Advisors), note in an update that talks with stakeholders have taken place and the mine is now set to be sold.
They add the successful bidder will be announced on August 28 and several bidders have proceeded to the due diligence phase.
The practitioners “remain of the view that there is a reasonable prospect of the company being rescued”.
IOL