Evraz Mulls Closing South African Unit, Risking 2,100 Jobsby
The business rescue team at Evraz Plc’s distressed South African unit is considering closing the steelmaker’s operations, placing more than 2,100 jobs at risk.
Evraz Highveld Steel & Vanadium Ltd. is poised to become the latest victim of a global steel supply glut that has eroded the margins of producers as China floods offshore markets with cheap exports. While Evraz Highveld was offered protection from creditors in 2015 as it sought a new owner, a deal failed to materialize after opposition from its parent and when the preferred buyer pulled out.
The decision to consider winding down Evraz Highveld’s operations comes after the Department of Labor suspended the payment of a training allowance on behalf of some employees, the company said in a statement to the Johannesburg stock exchange on Monday.
Closing the operations “would see the retrenchment of all employees,” Evraz Highveld said. The company will provide an update on Feb. 23, it said. About 2,187 staff would be affected by Evraz Highveld’s closing, trade union Solidarity said in an e-mailed statement.
Evraz Highveld on Feb. 10 notified workers it wouldn’t be able to pay salaries this month after the Unemployment Insurance Fund “had not fulfilled its promise to pay workers,” according to Solidarity. The fund provides short-term relief to workers when they become unemployed or are unable to work.