Robor goes into liquidation as Eskom cuts spending
The 97-year old steel tube and pipe manufacturer is being placed into voluntary liquidation amid cheap Chinese exports and poor SA conditions
JSE-listed media group Tiso Blackstar said on Wednesday it would write off its R137.6m investment in Robor, with the steel manufacturer to be liquidated due to weak local demand and cheap Chinese imports.
The decline of the SA economy over the past three years, delays in the signing of independent power producer agreements and the well-publicised financial demise of Eskom has caused systematic harm to production in revenue generation in the steel tube and pipe manufacturing sector, Tiso Blackstar said in a statement.
Tiso Blackstar, the publisher of Business Day, the Sunday Times, and Sowetan, holds 47.61% of Robor, which is considered a noncore asset. The Robor investment had an equity accounted carrying value of R137.6m, according to Tiso Blackstar’s 2018 annual report.
The effective cessation of Eskom’s planned 5,000km investment in additional power transmission lines had affected the company, the statement read, while the SA government had also not extended import duty and tariff protection to downstream industries.
“Regretfully, despite all efforts to right-size Robor’s operations, to procure additional tonnages for Robor’s world-class manufacturing facility and to source additional capital, Robor became increasingly unable to maintain the required levels of working capital and liquidity to retain its going concern status.”
In December 2017, Tiso Blackstar had disposed of a 3.4% interest in Robor for R16.5m, reducing its interest from 51.0% to 47.6%, which resulted in a loss of control and step down from a subsidiary to an associate.