The board of listed industrial company PSV Holdings, which provides steel, control valves and engineering linings, has put the financially distressed company into business rescue.

This is in contrast to the company’s optimism in the year ended February 28 2019 that recent efforts to turn the company’s fortunes around were paying off.

The company received a boost when black-owned DNG Energy, a gas company with operations in SA, Ghana, Nigeria and Mozambique, bought a 25.6% interest in the company, boosting its empowerment credentials.

PSV said in February that it was monitoring its financial position and would be in talks with lenders and creditors. “After careful consideration, the board of PSV has resolved that the company is in financial distress and has been put into business rescue. A business rescue practitioner will be appointed in due course,” the company said in a statement.

Business rescue is a form of bankruptcy protection aimed at rehabilitating a financially distressed company.

PSV said Standard Bank has attached the customer account of its subsidiary PSV Industrial in terms of an arrangement entered into in 2015. “Accordingly, the directors of PSV Industrial, a wholly owned subsidiary of PSV, have also resolved to place PSV Industrial into business rescue.”

The business rescue proceedings come after the group’s shareholders rejected a proposed rights offer in 2019. The issue of new shares was among steps to recapitalise the struggling firm, which has taken strain from the weak economy.

PSV’s specialised services business fared poorly as the sluggish economic growth weighed heavily on the gas sector.

The company, which has a market capitalisation of R94m, has been rocked by resignations of executives since 2018. These include former CEO Abilio da Silva, who resigned in November 2018, and former CFO Tony Dreisenstock, who left in February 2019.

Merchantec Capital resigned as the company’s designated adviser and company secretary in November 2019. In December 2019 PSV appointed Arbor Capital Sponsors as the designated adviser and Arbor Capital Company Secretarial as company secretary.