Evraz Highveld Steel and Vanadium, the vertically integrated steel and vanadium slag producer, on Tuesday issued a proposed restructuring notice in terms of Section 189, which could see it reduce its workforce by approximately 50%.
This follows the announcement on Monday that it has temporarily ceased steel production at its steelworks, citing working capital constraints and reduced domestic demand for steel – despite successful efforts to reduce fixed costs as well as process improvements in efficiencies.
The group, currently in business rescue, will now enter a 60-day consultation process, facilitated by the Commission for Conciliation, Mediation and Arbitration with employees and trade unions.
Evraz says that it will restructure to a curtailed operating mode, which will allow a start-up on a limited basis when market conditions improve and adequate funding obtained.
Meanwhile, Evraz confirms that it has received a number of indicative offers to invest in the company. The prospective bidders are required to provide the necessary guarantees by Monday 27 July 2015 to proceed to the next stage of the bidding process.