LONDON (Alliance News) - International Ferro Metals Ltd on Tuesday said the amended business rescue plan aimed at salvaging some value from its troubled South African subsidiary has been approved by its creditors.
The amended plan provides an illustration and estimate of the potential distribution to creditors of the subsidiary, International Ferro said, adding that "based on the plan's distribution schedule, it is not likely that International Ferro Metals shareholders would receive any distribution from the conclusion of the business rescue process".
The company placed its "financially distressed" subsidiary, International Ferro Metals (SA) (Pty) Ltd, into a Business Rescue in 2015 after being hit by strike action, falling ferrochrome prices, a fall in steel output driven by the economic slowdown in China and higher power costs.
A Business Rescue is a South African statutory means of enabling a financially distressed company to continue in business, under the supervision of a Business Rescue Practitioner, protected from its creditors. It means creditors who are trying to reclaim funds for whatever reason can not do so without going through the Practitioner, who will try to implement a plan to resolve the financial issues at the company.
The Practitioner, which submitted the plan that was accepted by creditors, will now work to execute the sale agreements with Samancor Chrome Ltd "as quickly as possible" to repay creditors, International Ferro said. Samancor Chrome has agreed to purchase the subsidiary.
Shares in International Ferro remain suspended.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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