Bushveld kicks off business rescue proceedings amid financial woes
Bushveld Minerals Ltd said on Tuesday that its principal subsidiaries have entered into business rescue, following Monday’s AIM trading halt.
The South Africa-focused vanadium producer’s shares were suspended due to concerns over its financial stability. Its main operations are now seeking ‘protection from legal action while their future is assessed and potential plans to rescue the business are implemented’.
These subsidiaries include mining rights holder Bushveld Vametco Holdings (Pty) Ltd, a service conductor working on the company’s behalf known as Bushveld Vametco Alloys (Pty) Ltd, and Bushveld Minerals SA (Pty) Ltd, which is used for its Johannesburg head office.
The past month has seen Bushveld scramble to resolve a funding shortfall highlighted in its third-quarter report. Earlier in November, Bushveld announced its failure to secure funds ‘to sustain its operations or meet its immediate liabilities’.
Chief Executive Officer Craig Coltman attributed the downward spiral to a depressed vanadium market, lack of cash for plant maintenance and ‘historically high, long outstanding creditor balances’.
Bushveld said it will focus on continuing operations whilst seeking funding solutions. It has nominated Matuson & Associates as rescue practitioner, and is in talks with Guernsey insolvency practitioners.
Coltman said Matuson ‘share our belief that there is reasonable cause for business recovery.’
Bushveld shares were last quoted at 0.31 pence in London. The stock was suspended from trading on Monday.
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