Johannesburg | Saturday
SHARES in South African iron and steel group Iscor Ltd shed more than four percent of their value on Monday as investors took fright over its delayed unbundling.
Iscor’s shares touched a session low of R27.70 before pulling back by 0930 GMT to be 3.15% or 95 cents weaker at R29.25, underperforming a slightly firmer broader market.
”People who were speculating on the unbundling are getting really nervous that it may not happen soon enough or even happen,” said a steel analyst, who declined to be named.
Iscor planned to split its mining and steel interests into two separately listed companies by early July in a bid to unlock shareholder value. But last month it said discussions with state investment body the Industrial Development Corp. to recapitalise their Saldanha Steel project might slow down the process.
On Monday Business Day newspaper said time was running out for Iscor to reach a deal with the IDC on a rescue plan for the debt-ridden Saldanha steel plant.
The report suggested if no deal was concluded soon the iron and steel giant may have to delay its plans to unbundle its mining and steel divisions.
Iscor’s full-year results for the year to the end of June are expected in July. If the Saldanha issue is not settled by then, Iscor will have to draw up a fresh unbundling documentation, resulting in an unexpected delay, analysts said.
The recapitalisation of Saldanha is expected to cost between four and R6.5-billion, analysts have said.
”The steel markets and the steel business is bad at the moment, so the share would have been quite a bit lower than this if there hadn’t been potential for the unbundling and a possible bidding war,” one analyst said.
The likely contenders for Iscor’s iron ore assets were seen as Rio Tinto, Anglo American and Billiton Plc . – Reuters