Attention: All Affected Persons of Hernic Ferrochrome Proprietary Limited (in business rescue)

Transcription

1 Hernic Ferrochrome (Pty) Ltd R/E of Ptn 103 De Kroon 444 JQ P.O. Box 4534 Brits 0250 South Africa 31 October 2018 Attention: All Affected Persons of Hernic Ferrochrome Proprietary Limited (in business rescue) Dear Sir / Madam NOTICE TO THE AFFECTED PERSONS OF HERNIC FERROCHROME PROPRIETARY LIMITED (IN BUSINESS RESCUE) ("THE COMPANY") IN TERMS OF SECTION 132(3)(b) OF THE COMPANIES ACT 71 OF 2008 Attached hereto is a copy of the progress report in relation to the business rescue proceedings of the Company for October Yours faithfully Peter van den Steen Trevor Murgatroyd tel fax Reg. No. 1994/008293/07 NON EXECUTIVE DIRECTORS: R Havenstein (Chairman) Y Doida* AC Fourie S Nakahara* R Karstel *Japanese

2 Companies and Intellectual Property Commission Republic of South Africa Form CoR Business Rescue Status Report About this Form This form is issued in terms of section 132 and 141 of the companies Act, 2008, and Regulation 125 of the Companies Regulations, This Notice and the attached report must be published to every affected person, and to- a) The Commission, if the business rescue proceedings were started by the company; or b) The court, if the proceedings were ordered by the court. 31 October 2018 Date: MURGAT01 Customer Code: Concerning (Name and Registration Number of Company) Hernic Ferrochrome Proprietary Limited Name: Registration No: The above named company commenced business rescue proceedings on 21 September /008293/07. Because the business rescue proceedings have not concluded within three months, the appointed business rescue practitioner provides the attached report in terms of section 132 (3). A report and Notice must be issued at the end of the first three months of the business rescue proceedings, and at regular monthly intervals after that Contacting the Commission The Companies and Intellectual Property Commission of South Africa Postal Address PO Box 429 Pretoria 0001 Republic of South Africa Tel: Name and Title of person signing on behalf of the Practitioner: Ryan Smith - Attorney for joint business rescue practitioners Authorised Signature: This form is prescribed by the Minister of Trade and Industry in terms of section 223 of the Companies Act, 2008 (Act No. 71 of 2008).

3 _1.docx Hernic Ferrochrome Proprietary Limited (in business rescue) with registration number 1994/008293/07 (the "Company") Business Rescue Status Report in terms of Section 132(3) of the Companies Act 71 of 2008 ("the Act") 1. Introduction This report is for the month of October 2018 and is published as an update to the business rescue status report for the month of September 2018 published to affected persons and filed with the Companies and Intellectual Property Commission. 2. Implementation of the Adopted Business Rescue Plan 2.1 The adopted business rescue plan continues to be implemented in accordance with the terms thereof. 2.2 All of the conditions precedent of the Sale of Business Agreement (as referenced in paragraph of the adopted business rescue plan) are being progressed. 2.3 We set out below an update on certain of the remaining conditions precedent to the Sale of Business Agreement: Competition Approval The Commission requested certain additional information, which the parties provided. The information request is ongoing and the Commission has asked for time to consider the submission, until 15 November 2018.The BRPs continue to engage with the Commission as required The foreign competition filing in China was submitted on 19 October The Chinese Competition Authority has requested additional information for clarification and the response is expected to be submitted to them by Friday, 2 November The Authority is expected to respond within 30 days from the date of the original submission.

4 Exchange Control Approval All additional information requested by the South African Reserve Bank has been submitted. The BRPs continue to pursue satisfaction of this condition Third Party Consents to Material Contracts Three out of the four assignment agreements have been signed. The BRPs continue to monitor this and pursue the satisfaction of this condition Section 11 Application The relevant Ministerial Consent has not yet been provided, but the BRPs continue to monitor this. Regular engagements with the relevant officers at the Department of Mineral Resources are ongoing. 3. Litigation Update The bill of costs in respect of the Industrial Development Corporation of South Africa Limited litigation has now been taxed. 4. Market Conditions 4.1 Market conditions appear to have softened with a slight reduction of prices in China for November down around RMB100. The Chinese tender price is still expected to improve over the medium terms on the back of stronger demand but current trade conditions are still uncertain. 4.2 A significant proportion of Hernic s exports go to European customers. The European Benchmark Pricing for the next quarter has been set for 124c/lb down 14c/lb from the last quarter. 4.3 The Rand US Dollar remains volatile. 4.4 Despite the adverse market indicators, forecasts continue to indicate that the Company is relatively stable. The Company's financial position is monitored continuously by the BRPs and management. 5. Local Community Engagement The Company continues with engagements with leadership from different communities surrounding the Company.

5 3 6. General 6.1 To date, undisputed amounts due to suppliers to the Company and amounts due to employees continue to be paid in the ordinary course, as and when payments have fallen due. The shareholders loan claims remain subject to the moratorium. 6.2 The Company continues to produce and operate in the ordinary course. SIGNED AT JOHANNESBURG THIS 31 st DAY OF OCTOBER 2018 Peter van den Steen Trevor Murgatroyd