JOHANNESBURG (miningweekly.com) – Ferrochrome producer International Ferro Metals (IFM) expects to publish the business rescue plan for its embattled South African subsidiary IFM South Africa (IFMSA) by November 30, noting in a statement on Monday that the business rescue process continues on schedule.
The company added that, as a result of the ongoing processs, it would not publish its 2015 annual report by the end of October, but planned to release the report in December.
“The company continues to work with the business rescue practitioner in respect of IFMSA with the aim of maximising value to all stakeholders,” it held.
IFM said in September that deteriorating business conditions had pushed its South African business, which operates the Lesedi underground mine and ferrochrome smelting operations, into business rescue.
The financially distressed IFMSA had been battling a downward trend in its operations and profitability that had proved more “deep-seated and sustained than anyone expected”.
Since the beginning of the 2015 financial year, the company had faced unsustainably low ferrochrome prices; rising costs, including labour and electricity costs; and interruptions in power supply and the resultant production losses.
The company recorded a pretax loss of R176-million for the six months to December 2014 and expected to report similar operating losses for the second half of the 2015 financial year.
The business rescue process could see some of IFMSA’s furnaces and all mining operations idled to reduce expenses.
However, the parent company would continue to sell upper-group two chromite produced under a contract with Rustenburg Platinum to cover some of the ongoing costs.
Mining Weekly Online reported in September that the company had been approached – and had subsequently entered negotiations – regarding a potential sale of IFMSA and another subsidiary Purity Metals.
“Even though IFMSA has been placed in business rescue, IFM itself remains solvent and expects to have sufficient cash to be able to cover its expenses of continuing operations during the period of the business rescue and to implement the proposed sale of IFMSA and Purity,” the company said at the time.