{"id":807846,"date":"2025-01-21T13:00:00","date_gmt":"2025-01-21T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=807846"},"modified":"2025-01-21T13:01:40","modified_gmt":"2025-01-21T11:01:40","slug":"major-south-african-mining-company-enters-business-rescue","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/807846\/major-south-african-mining-company-enters-business-rescue\/","title":{"rendered":"Major South African mining company enters business rescue"},"content":{"rendered":"\n<p>Bushveld Minerals and its related companies have entered business rescue, unable to pay debts when they become due.<\/p>\n\n\n\n<p>The company is a major primary, upstream vanadium producer that owns mines and processing plants. Its clientele includes steel and chemical producers.<\/p>\n\n\n\n<p>However, on 15 November 2024, Bushveld Minerals SA (BMSA), Bushveld Vametco Holdings Limited (BVH) and Bushveld Vametco Alloys Limited (BVA) entered business rescue. <\/p>\n\n\n\n<p>The directors of the company conducted investigations into the financial affairs of the group, finding operations to be in financial distress.<\/p>\n\n\n\n<p>The group was unable to pay its debts when they became due within the following six months.<\/p>\n\n\n\n<p>BMSA is indirectly 100% owned by Bushveld Minerals. It generates no income and is entirely reliant on management fees charged to BVA and\/or BVH to fund its operating costs.<\/p>\n\n\n\n<p>BVA is a wholly-owned subsidiary of BVH, and the issued shared capital of BVH is as follows: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>74% by Bushveld Vanadium 1 Proprietary Limited, which is indirectly 100% owned by Bushveld Minerals;<\/li>\n\n\n\n<li>26% by Bushveld Minerals.<\/li>\n<\/ul>\n\n\n\n<p>The group said that BVA&#8217;s financial distress follows historically high creditor balances, which required a surplus of cash over and above that generated by operations to reduce long outstanding amounts. <\/p>\n\n\n\n<p>Due to the creditor challenges, procurement of goods and services has been from non-preferred suppliers, impacting both price and quality. <\/p>\n\n\n\n<p>Moreover, sustained depressed global vanadium markets reduced the revenue to an amount below the cost of production.<\/p>\n\n\n\n<p>This generated losses every month for the year leading up to the business rescue application. <\/p>\n\n\n\n<p>An ageing plant with machinery that has not been appropriately maintained at the required level due to a shortage of funds has also led to breakdowns and loss of production, creating additional costs and lost revenue. <\/p>\n\n\n\n<p>The resultant future cash flows of BVA remain challenging and the going concern is uncertain.<\/p>\n\n\n\n<p>BMSA and BVH&#8217;s financial distress comes amidst challenges in receiving management fees and other inflows from BVA that allow them to sustain their operations. <\/p>\n\n\n\n<p>The resultant future cash flows of both BMSA and BVH also remain challenging and the going concern is uncertain.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/bushveld-minerals-gallery-1-e1737452726719.webp\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"704\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/bushveld-minerals-gallery-1-1024x704.webp\" alt=\"\" class=\"wp-image-807849\"\/><\/a><figcaption class=\"wp-element-caption\">Source: Bushveld Minerals<\/figcaption><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\">Chances of recovery <\/h2>\n\n\n\n<p>Despite the company&#8217;s problems, capital inflows of at least US$15 million (R290 million) are due to BVA in the next three years from the sale of assets by the Bushveld Minerals group.<\/p>\n\n\n\n<p>There are also trade debtor balances over US$7 million (R13 million) that will become due and payable to BVA.<\/p>\n\n\n\n<p>The business rescue application also notes that BVH and BVA&#8217;s asset value and deposits are valued way below the replacement costs making the business potentially very attractive to buyers.<\/p>\n\n\n\n<p>The vanadium price also showed encouraging increases from the start of October.<\/p>\n\n\n\n<p>Various global trade and geo-political factors indicate that this increase would continue until the vanadium price rose to $40, which would turn the companies profitable. <\/p>\n\n\n\n<p>At least two interested third parties have also expressed interest in investing in BVA&#8217;s business.<\/p>\n\n\n\n<p>That said, no binding offer had been received by the business rescue commencement. <\/p>\n\n\n\n<p>The business rescue proceedings are expected to afford the companies time to allow their business rescue practitioner, Matuson Associates, to meet with potential investors\/purchasers.<\/p>\n\n\n\n<p>This would result in a better return for creditors and shareholders than the immediate liquidation of the companies, the practitioners said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bushveld Minerals and its related companies have entered business rescue, unable to pay debts when they become due.<\/p>\n","protected":false},"author":95,"featured_media":807851,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[21486,21487],"class_list":["post-807846","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-bushveld-minerals","tag-matuson-associates-2"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/807846","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=807846"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/807846\/revisions"}],"predecessor-version":[{"id":807884,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/807846\/revisions\/807884"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/807851"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=807846"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=807846"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=807846"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}