International Ferro Metals Share Discussion Threads

[holmess] 26/8/2015 19:34

Jotoha2 - you shelf stackers at tesco always have your finger on the city pulse ;) Interesting developments here.

[jotoha2] 26/8/2015 18:27

I hear its administration and management buyout for £2 million .

[tomboyb] 26/8/2015 17:15

After enterprise value - You have a floating $100mill worth of value which should see some return to shareholders -

Another one of my stocks PVCS was cash heavy at 4p - went 28p and the a subseqent return of cash - IFL is asset heavy in a distressed market - It all depends on what someone is willing to pay in the current climate -

Gopod luck -

[tomboyb] 26/8/2015 17:05

They entered "buisness rescue" as a solvent buisness - If they can get a going concern as a business ( over time) then this could be bargain -

For us, it the returns we get and at what level - 2p to 10p

[yineaopqwhf] 26/8/2015 17:00

Is there any way to get my hands on some shares e.g. through private sale from another person, from another broker with an overhang, or from the house broker numis? Hoping to get some at a deep discount since this is likely going bust.

[tomboyb] 26/8/2015 16:58

"Total enterprise value is c. $50mn while stated equity value is c. $150mn."

Roughly correct -

we have to see if anyone will bid for the entire equity -

[crossdresser] 26/8/2015 16:53

speculation on what may happen can also lead to you being sat in your car with a hosepipe in the window. It's a 10p from me 👍

[pennyfalls] 26/8/2015 16:37

Sub $50Mill by far IMO...Not a seller's hand for IFL and already stated satisfactory offers have not come in.
Bottom fishing here for someone picking up IFL, but hopeful of a few pence back (at most)

[pennyfalls] 26/8/2015 16:37

Sub $50Mill by far IMO...Not a seller's hand for IFL and already stated satisfactory offers have not come in.
Bottom fishing here for someone picking up IFL, but hopeful of a few pence back (at most)

[crossdresser] 26/8/2015 16:23

There is at least more than one interested party, guess the bids will play out but at least it gives what is left to sell the chance of obtaining its best value in current conditions

[gark] 26/8/2015 15:09

Total enterprise value is c. $50mn while stated equity value is c. $150mn. In my view they will sell for around enterprise value. That is where market is pricing it and they are in distress so anything above $50mn will be a good result.

[tomboyb] 26/8/2015 14:57

"During the period of the Business Rescue, IFL will seek to sell its shares in IFMSA and Purity. It is reasonably expected that, after satisfying creditors and transaction expenses, a surplus should be generated that can be distributed to shareholders. The Company is in negotiation with an interested party and has been recently approached by others in relation to a potential sale. Any such sale will be subject to obtaining certain regulatory approvals, as a result it is envisaged that the period of the Business Rescue could be about six months. However, it is not certain that a sale on satisfactory terms will be able to be concluded."

- Sell shares in IFMSA
- PURITY

A sale of both the subsiduries or a sale of the entire issued capital of IFL

Like to see what peeps think of what value can be achieved for shareholders.

[rishika2] 26/8/2015 13:45

did anybody speak to this company mgmt or an email ?

[tomboyb] 26/8/2015 13:41

I would of thought a sale of the entire equity here -

Of course that would need the agreement of the 29% shareholder -


If it is the enterprise value (i.e mkt cap + cred), then that would be a significant climbdown i.e firesale

All speculation, certainly on my part -

[konil] 26/8/2015 13:36

its not clear to me whether ifl intend to continue trading after sale of assets and clearance of debt...with a much smaller asset base of course but debt free.

or perhaps just wind down completely once (all) assets have been sold off.

[bam bam rubble] 26/8/2015 13:34

Need to look at enterprise value (market cap + creditors) not just the market cap

Management reckon it can sell for close to enterprise value so shareholders won't
be left with nil, but this management have reckoned lots of things over the years
most of which failed to come to pass.

[tomboyb] 26/8/2015 13:22

Given the current balance sheet and Global situation - I'm wondering what we can expect in terms of shareholder returns -

Given the current market cap is 5mill - ?

[bam bam rubble] 26/8/2015 13:19

- operations ceased (other than chrome stockpile sales under existing contract)

- in administration to put a stay on Bank of China's claim over secured assets

- 6 months to complete a sale process and pay creditors (with any surplus sale
proceeds distributed to shareholders), otherwise Bank of China gets the assets

[konil] 26/8/2015 12:57

firesale it is then.

:(

[pennyfalls] 26/8/2015 12:54

Ps Interesting though - and I hope those in at a much higher price at least see a significant % of investment, rather than a token 1 -2p

[pennyfalls] 26/8/2015 12:53

Any predictions of asset sale winging itself back to shareholders in Shareprice terms..?
Sale will be at a massive discount in present global commodities climate with company with its back to the wall/debt situation..

[gark] 26/8/2015 12:45

Sale to Jisquan Steel and see what is left over?

[tomboyb] 26/8/2015 12:44

The Company is in negotiation with an interested party and has been recently approached by others in relation to a potential sale

[tomboyb] 26/8/2015 12:41

Wednesday 26 August, 2015
International Ferro Metals
IFMSA enters Business Rescue
26 August 2015

International Ferro Metals Limited
(“IFL” or the “Company”;)

IFMSA enters Business Rescue

As a result of deteriorating business conditions, IFL’s South African subsidiary, International Ferro Metals (SA) (Pty) Limited (“IFMSA”), which operates the IFL Group's Lesedi mine and ferrochrome smelting operations, has taken the step of entering into Business Rescue. This is a South African statutory means of enabling a financially distressed company to continue in business, under the supervision of a Business Rescue Practitioner, protected from its creditors. While in Business Rescue there is a moratorium on creditors and others taking legal proceedings or enforcement action against IFMSA or in relation to its property or assets. This allows for the development and implementation of a Business Rescue Plan to seek to enhance the potential return for IFMSA's stakeholders.

Despite the stringent cost cutting measures taken by IFMSA, its financial outlook is such that it is facing financial distress. The underlying reasons for this were set out in the Production Report for the three months ended 30 June 2015, and the principal ones are noted below.

Since the beginning of the 2015 financial year, the IFL Group has suffered from a downtrend in its operations and profitability that has proved more deep-seated and sustained than anyone expected. It is consistent with the significant decline in global commodity markets generally. The Company reported a loss before tax of ZAR176 million for the half year ended 31 December 2014 and operating losses for the second half of FY15 are expected to be similar to the first half.

The price of ferrochrome has continued to decline. This has been caused largely by the slowdown in Chinese economic activity and its consequent effect on stainless steel output and increased production by Chinese ferrochrome producers. These factors have driven prices lower and are expected to continue to keep prices low.

IFMSA has also been affected by rising costs and other factors which have impacted its operations, which largely are outside of its control. This includes militant union activity and a general thrust for above inflation wage hikes which have increased IFMSA's labour costs.

Most significant of all are the rising electricity costs and interruptions in power supply. Ferrochrome producers rely heavily on electricity for their furnaces and are particularly vulnerable to power discontinuity. Since 2007, Eskom’s prices have increased by 374% for heavy industrial users, which equates to 21.5% p.a. against CPI inflation of 6.3% p.a. over that same period. In July IFMSA lost more than 10% of its ferrochrome production because of load shedding and power trips.

Production losses also occurred during the year resulting from section 54 orders to shut the furnaces made by government inspectors. While IFMSA was vindicated in court proceedings to lift these orders, the damage was done. Recently a strike of workers employed by one of IFMSA's contractors resulted in IFMSA having to reduce production from its furnaces and disrupted its logistics and shipping schedule, causing a further loss in production and strain on its liquidity.

The combination of low ferrochrome prices, high electricity prices and other costs and losses of ferrochrome production have strained IFMSA's liquidity to the point that it is now in financial distress that is best resolved through the protection of Business Rescue.
The Business Rescue process may entail a shutdown of its furnaces and all mining operations, significantly reducing its expenses. It will continue to derive income from the sale of UG2 chromite produced under a contract with Rustenburg Platinum. Such income is expected to cover ongoing costs, allowing IFMSA to continue in business during the period of the Business Rescue.

IFL also owns Purity Metals Limited which owns 80% of the Sky Chrome mine. As noted in the Production Report, mining at Sky Chrome remains suspended. It is not envisaged that Sky Chrome will also decide to enter into Business Rescue.
During the period of the Business Rescue, IFL will seek to sell its shares in IFMSA and Purity.

It is reasonably expected that, after satisfying creditors and transaction expenses, a surplus should be generated that can be distributed to shareholders. The Company is in negotiation with an interested party and has been recently approached by others in relation to a potential sale. Any such sale will be subject to obtaining certain regulatory approvals, as a result it is envisaged that the period of the Business Rescue could be about six months. However, it is not certain that a sale on satisfactory terms will be able to be concluded.

Even though IFMSA has been placed in Business Rescue, IFL itself currently remains solvent and expects to have sufficient cash to be able to cover its expenses of continuing operations during the period of the Business Rescue and to implement the proposed sale of IFMSA and Purity.
Given the circumstances of the IFL Group, IFL has applied to the Financial Conduct Authority for a suspension of the listing of its securities on the Official List for a period of six months, or such shorter period in which the proposed sale is concluded.
- ENDS-
For further information please visit www.ifml.com or contact:
International Ferro Metals Limited Tel: [phone]
Chris Jordaan, Chief Executive Officer
Numis Securities Limited Tel: [phone]
James Black / John Prior / Paul Gillam
About International Ferro Metals:
International Ferro Metals produces ferrochrome, the essential ingredient in stainless steel, from its integrated chromite mine and ferrochrome processing operations in South Africa. International Ferro Metals is listed on the London Stock Exchange under the symbol IFL.
Forward Looking Statements
This announcement contains certain forward looking statements which by nature, contain risk and uncertainty because they relate to future events and depend on circumstances that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements.

[tomboyb] 26/8/2015 11:58

Good luck Konil -

Assets of IFL far exceed its debt and fixed is over double that -

You never know, however when situations such as this arise - A similar situation in a different industry arose with another share PVCS - However that was cash rich.

IFL is asset rich in comparison ( Whatever that is in todays enviroment)