Johannesburg | Tuesday
SOUTH Africa’s Industrial Development Corp (IDC) said on Monday it would not agree to an unbundling plan for steel producer Iscor until certain conditions were met.
Iscor and the IDC have been in talks over the recapitalisation of their 50/50 joint venture Saldanha Steel, which needs to refinance more than R6-billion rand in debt.
The negotiations have also centred on the long-term supply of iron ore to Iscor after Iscor unbundles its mining division Kumba Resources.
The unbundling of Iscor’s mining and steel assets, which will be listed as separate entities, is seen as key to unlocking value.
Iscor said on Sunday that state-owned IDC had agreed ”in principle” to its plan for unbundling and that it hoped to conclude the deal by end of September.
However, IDC said on Monday it had laid out conditions for the unbundling to happen, among them the sale of a strategic equity stake in the unbundled steel asset Iscor Steel, to a foreigner.
”Our position is crystal clear. We have three conditions that must be met by Iscor before we recapitalise Saldanha Steel,” said the statement.
The IDC also said it had not agreed on a timetable for the unbundling.
”We have no timetable, as far as we are concerned it is far more important to ensure the right solution is put in place rather than that a hurried solution is imposed,” the IDC said.
The IDC said it was in talks with steel group Ispat international which had been promised a one-month exclusive period up to the end of September to evaluate its interest.
The acquisition of an international partner would ”ensure that the IDC will not have more than 49 percent of Iscor Steel,” the statement said.
Another condition is that shareholders in the unbundled Iscor Steel have an equity stake in Kumba Resources. The IDC also said it would not consider recapitalising Saldanha Steel as a stand-alone plant. – Reuters