Nasdaq- and London-listed specialist alloy producer Afarak Group has placed its South African subsidiaries into voluntary business rescue.
The companies have been in financial distress since South Africa implemented the Alert Level 5 Covid-19 lockdown at the end of March, but Afarak's board is confident that both Afarak Mogale and Afarak South Africa will recover.
The company assures that the business rescue proceedings of the two companies will not affect the remaining mining assets and businesses held by the group.
The subsidiaries will continue operating during the business rescue, with its main furnace expected to restart production before the end of May.
“During the extension of the lockdown, most businesses remain fully shut and it is not possible to export goods outside of the country.
“The consequent stagnation in the economic activities, which has permeated the world economy as well, has completed the scenario on the already persistent global recession. This situation is, unfortunately, likely to continue hitting the market and the global economy in the coming weeks and months,” Afarak explains.
The group has specialty alloys operations in South Africa, Turkey, Germany, London, Helsinki and Malta.