The business rescue plan of International Ferro Metals SA (IFM SA), the South African subsidiary of International Ferro Metals has been approved by the company’s creditors.
This follows the announcement in August that IFM SA had entered into business rescue as a result of deteriorating business conditions.
Financially distressed IFM SA, which operates the Lesedi mine and ferrochrome smelting operations in the Bushveld Igneous Complex, has suffered from a downward trend in its operations and profitability that has proved more deep-seated and sustained than anyone expected, the company said upon announcement of the business rescue.
The business rescue practitioner (BRP) will now seek to negotiate and execute the relevant sale agreements with Samancor Chrome (Samancor) as quickly as possible, but by no later than 15 February 2016, otherwise the BRP will need to revert to IFM SA’s major creditors, Bank of China and the company’s subsidiary International Ferro Metals SA Holdings.
The company said in an announcement on Tuesday that it is currently not possible to assess with any certainty what potential return may be received by the company because of uncertainties related to future costs and cash flows to fund the business rescue proceedings.
The business rescue plan does provide an illustration and estimate of the potential distribution to creditors of IFM SA in terms of the plan.
The plan assumes that the proceeds derived by IFMS A from the proposed transaction will be an amount of R720 million, however, it is no more than an example and is not binding on the BRP.
The company says that the illustration is subject to change depending on the circumstances at the time the distribution is to be made.