- Company wants court to set aside vote accepting rescue plan
- Also asks court to declare rescue practioners' pay invalid
Evraz Plc, a Russian steelmaker, has asked a South African court to block a rescue package for its unit in the country.
Evraz, acting through subsidiaries East Metals and Mastercroft, wants South Africa’s High Court to declare a business-rescue plan for Evraz Highveld Steel & Vanadium Ltd. invalid, even after creditors approved it earlier this month, the company said Friday in a statement.
It also wants the court to set aside the Oct. 13 creditor vote and the business-rescue practitioners’ remuneration. The company didn’t provide a reason for its request.
Highveld, once South Africa’s second-biggest steel producer, was placed under business-rescue proceedings, the local equivalent of bankruptcy protection, in April after a slump in demand for the metal and a surge in cheaper imports left it with insufficient funds. Creditors this month voted in favor of Hong Kong-based International Resources Ltd. buying the company for 370 million rand ($28 million), with 95 percent of the payment going to creditors.
International Resources said it will invest a further 4.1 billion rand in the business over the next four years. Without being bought by IR, Highveld would probably need to be liquidated, according to business rescue practitioners Matuson Associates.
Highveld and the business-rescue practitioners will oppose Evraz’s court application, the statement said.
Evraz, partly controlled by billionaire Roman Abramovich, paid more than a combined $678 million to buy Highveld in two transactions from Anglo American Plc in 2006 and 2007.