Mining Weekly reported that two companies linked to Evraz Highveld Steel and Vanadium (OTCMKTS:HGVLY), East Metals and Mastercroft, have approached the High Court in an attempt to have the company’s business rescue plan declared invalid and have the creditors vote set aside.

East Metals is a large creditor, while Mastercroft holds shares in East Metals and 85% of Highveld, which entered voluntary business rescue in April this year. The two companies allege that there was a serious nondisclosure by the business rescue practitioners ahead of the vote, which materially changed the outcome.
The alleged nondisclosure related to an additional claim submitted by the South African Revenue Service (SARS), which altered the creditor dynamic and raised the overall creditor debt to nearly R2.4-billion from around R1.2-billion. Had voting taken place on the debt outlined in the rescue plan, East Metals, whose debt stood at R378-million, would have constituted 32% of the total voting interest. This interest would have been sufficient to defeat the plan, with the approval threshold set at 75% of creditors’ voting interest.
In the event, more than 75% of all creditors and 90% of so-called independent creditors – which excluded related parties to Highveld, such as East Metals – supported the business rescue plan during the October 13 vote.

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