Tiso Blackstar sells non-core steel subsidiary to Macsteel

Media group Tiso Blackstar has said it had signed a sale of shares and claims agreement with Macsteel Service Centres in which Macsteel would purchase 100 per cent of Consolidated Steel Industries (CSI).

In June 2015, Stalcor (established 1973) completed a merger with Global Roofing Solutions (GRS) to form Consolidated Steel Industries (CSI). Both were part of the Blackstar Group at the time.

Global Roofing Solutions (GRS) is a leading South African roofing material manufacturer consisting of Brownbuilt (established in 1964) and HH Robertson (established in 1958), making it one of the largest metal roofing manufacturers in South Africa and the African continent. CSI owns 100% of Stalcor, a highly regarded producer, stockist and distributor of stainless steel and aluminium products, servicing a variety of sectors, in particular the manufacturing, engineering, mining and construction industries.

CSI announced in February 2018 that it has acquired a 40 per cent stake in Erogsystem Walling Solutions.

Tiso Blackstar said this was part of its strategy to exit its non-core, non-media related assets. Also in the Tiso Blackstar Group is Robor (established in 1922), a manufacturer and supplier of welded steel tube and pipe, cold formed steel profiles and associated value added products. Robor was acquired in 2015 and Tiso Blackstar is currently looking to offload it.

“The steel industry in South Africa in which CSI operates is in significant decline,” it said.

It said the deal would be for a cash consideration equivalent to the consolidated net asset value of CSI and its subsidiaries to be determined at the last day of the month immediately preceding the month in which the last of the conditions precedent were either fulfilled or waived.

The CSI net asset value amounted to R68.9 million as at December 31, 2017.

The purchase consideration would be settled in cash on the 5th business day after it had been determined, and would be applied to reduce Tiso Blackstar’s term debt, the company said.

The CSI disposal was subject to the fulfilment or waiver of a number of conditions precedent, including being unconditionally approved in terms of South Africa’s Competition Act or being conditionally approved on terms and conditions which both Macsteel and Tiso Blackstar Holdings accepted.