Bushveld places South African entities in business rescue
A day after halting trading in its shares on the LSE owing to liquidity constraints, integrated vanadium producer Bushveld Minerals has placed its principal operating subsidiary Bushveld Vametco Holdings, along with Bushveld Vametco Alloys and Bushveld Minerals SA – its South African entities – in business rescue.
A business rescue proceeding affords the South African entities protection from legal action while their future is assessed and potential plans to rescue the business are implemented.
The company has nominated Piers Marsden and Jenna Osborne of Matuson & Associates to be its joint business rescue practitioners, who are in the process of filing with the Companies and Intellectual Property Commission.
Matuson & Associates has significant experience in business rescue, turnarounds and corporate restructures in the South African mining sector.
"This was not an easy decision to take or one that was done lightly; however, in the current circumstances, it is the only course of action that the board could take in the interest of all stakeholders.
"The principal conditions that have led the board to this decision are the depressed vanadium market that has resulted in us operating at a loss for an extended period of time; the lack of cash availability that restricted the amount of maintenance and repairs that could be done at Vametco, resulting in heightened levels of plant breakdowns and production loss; historically high, long outstanding creditor balances; and failure to procure suitable funding from existing stakeholders or third parties despite efforts to do so," says Bushveld Minerals CEO Craig Coltman.
The company had, in recent weeks, announced that it was slowing down production at Vametco while it worked to secure additional funding.
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