EVRAZ sells 34% stake in EVRAZ Highveld Steel and Vanadium
EVRAZ plc (LSE: EVR) (“EVRAZ” or the “Company”) has signed an agreement to sell 34% of the issued share capital of EVRAZ Highveld Steel and Vanadium Ltd (“EHSV” or “Highveld”) held by EVRAZ to Macrovest 147 Proprietary Limited (“Macrovest”) for ZAR 289 million (equivalent of USD 27 million as of 12 August 2014). It has been agreed that Macrovest will also refinance 50% of the outstanding working capital facility provided by EVRAZ plc.
The purchaser of the shares, Macrovest, is led by Barend Petersen, a chartered accountant with significant local and global experience. Mr Petersen is the executive chairman of De Beers Consolidated Mines, and a non-executive director of De Beers Group, Ponahalo Group, Anglo American South Africa, Alexander Forbes, Curro Holdings as well as Sizwe Business Recoveries which he founded in 1998. He is also the chairman of the Environment Community Occupational Health and Safety Committee of De Beers Group.
The sale of such a significant interest in Highveld to a local strategic investor is an important step to ensure sustainable development of Highveld as South Africa’s leading steel and vanadium business.
Alexander Frolov, EVRAZ CEO, said,
“We have analysed various options for the further development of Highveld and decided to introduce a strong local partner, who we believe will add significant value and expertise in developing our South African asset in a challenging market. We are looking forward to working together with Macrovest and Mr Petersen personally on the Board of Highveld. As a result of the transaction, EVRAZ will remain a 51% shareholder of Highveld and continue to focus on growing operating efficiency and profit enhancing initiatives.”
Barend Petersen said,
“This transaction is significant, not only for Highveld, but also for the whole sector of the beneficiation of minerals mined in South Africa. We are optimistic of Highveld’s future development as a reliable and sustainable steel and vanadium producer and significant local employer, and are certainly pleased to make this strategic investment in Highveld as a part of global EVRAZ group.”
Commenting on the announcement by EVRAZ plc, Trade and Industry Minister Rob Davies said:
"The Department of Trade and Industry (the “dti”) welcomes the transaction as a major step on the road to creating black industrialists. The South African Government has long held the view that the local steel sector is a critical pillar of regional industrial and economic development. Therefore, the dti views this transaction as a major development for the local steel industry and we welcome the fact that a South African entity will be holding a significant stake in this strategic asset. The steel sector is of critical importance to South Africa's infrastructure investment programme, amongst others, and it is in this light that we are watching this transaction and other developments with keen interest."
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