Tumisang Kgaboesele of Thomson Wilks, the Business Rescue Practitioner of Steelbest Manufacturing (Pty) Ltd (Steelbest) has notified creditors and interested parties that he has applied to the High Court Pretoria to convert the Business Rescue proceedings into liquidation proceedings. The applicant has concluded that there is no reasonable prospect for Steelbest to be rescued.

The business rescue proceedings commenced on 10 March 2025, but are now being discontinued as provided for in Sections 132(2)(a) and 141(2)(a)(ii) of the Companies Act 71 of 2008. The applicant seeks an order that the business rescue proceedings of Steelbest be discontinued in terms of the provisions of Section 132(2)(a) read with Section 141(2)(a) of the 2008 Act. In addition, the applicant seeks an order that Steelbest be finally wound up in the hands of the Master of the High Court on the following basis: Steelbest is factually insolvent in that its liabilities exceed its assets; Steelbest is unable to pay its debts as contemplated in terms of Sections 344 and 345 of the Companies Act 61 of 1973.

Zealous Pressure Castings was established as a zinc die casting company in 1970 before changing emphasis to the aluminium die casting industry in 1996. Zealous Automotive was established in 2003 to service the automotive OEM market, supplying finished and sub-assembled components direct to automotive assembly lines.

In May 2016 the Zealous companies were put into business rescue to facilitate the rehabilitation of the company that had become financially distressed. This was despite the automotive division having major contracts in place with a local OEM.

When Steel Best Manufacturing acquired Zealous Automotive it had a state-of-the-art aluminium die casting and machining cell at its disposal. The core of the die casting cell is the fully automated Buhler Carat 140L compact two-platen hydraulic locking die casting system

The Steel Best Group, headed up by Reuben Olifant, subsequently showed an interest to become involved with the aluminium foundry group and in late 2016 installed a management team to implement a business rescue plan that had been agreed upon with stakeholders.

In 2018 the Steel Best Group, a company with manufacturing facilities in Port Elizabeth, Eastern Cape but with its head office in Pretoria, Gauteng, acquired the Zealous companies.

Initially one of the main clients that the company had a contract with – Volkswagen South Africa – was presented with a turnaround plan and they accepted what was proposed at the time. “VWSA showed confidence in us, as did one of the major shareholders, the IDC. They had a 49% stake in the business,” said Olifant who was one of the shareholders, the other being his wife Gail Olifant.

During the course of the business rescue plan there were name changes that took place. Zealous Automotive became Steel Best Automotive and Zealous Pressure Castings became Steel Best Pressure Castings.

However, in September 2020 Steel Best Automotive Pty Ltd was liquidated due to historical debt prior to the Steel Best Group’s involvement and all the assets, which included six cold chamber die casting machines (350 ton to 1 000 ton), one Buhler Evolution 140D die casting cell (1 400 ton), a Striko Westhoven tower melt bulk furnace, gas smelter, six holding furnaces, 15 CNC machines and many other associated equipment including CMMs, robots, measuring and X-ray equipment and a 3D measuring machine, went on auction on the 29th January 2021.

One of the stipulations of the auction was that the offer had to be ‘purchase as one lot’ and no individual machine or equipment offers would be accepted.

It was no surprise then that Steel Best Manufacturing Services emerged as the successful bidder. This company name was chosen as a company with the name of Steel Best Manufacturing that was based in Port Elizabeth and was also owned by Olifant, closed its doors in May 2019. According to Olifant the closure stemmed from the financial collapse of LN Manufacturing, the company from whom he had purchased Steel Best Manufacturing and he had tried to rescue. Furthermore, this closure formed part of the Steel Best Group’s strategy to clean up its structures from any negative legacy issues that emanated from its acquisitions in the automotive sector.

The company continued to operate but 10 March 2025, the board of directors of Steelbest resolved to voluntarily commence business rescue proceedings and placed Steelbest under supervision. Simultaneously, Olifant, deposed to a sworn statement in terms of Section 129(3) of the 2008 Act dealing with the financial distress of Steelbest, the preliminary plan to address the financial distress, and pending legal proceedings.

According to the sworn statement, Steelbest was financially distressed and it appears reasonably unlikely that Steelbest would be able to pay all of its debts as they fall due and payable within the immediately ensuing six months. The financial distress of Steelbest, according to the sworn statement, could be attributed to the relationship between Steelbest and one of its major clients, Volkswagen South Africa, had come to an end as Volkswagen South Africa has terminated its agreement with Steelbest and Steelbest was struggling to execute its current order book due to the cash flow constraints caused by the impact of the termination of the agreement it held with Volkswagen South Africa.

At the time of the company going into business rescue the BRP was advised that there were prospects that further orders would be awarded to Steelbest. These included Ford Motor Company giving an order of R30 million over a period of seven (7) years; Prim local and export had a projected order of R13 million over a period of nine (9) years; and wait for it, Pure Export (consisting of five (5) different components) had a projected order of R600 million over a period of four (4) years.

At the end of March 2025 total liabilities R61 297 519.00 were nearly double of the total assets which were R33 462 593.00. Steelbest’s liabilities therefore exceed the value of its assets by at least R27 834 926.00.

The previous owners spent over R60 million on a new casting cell, at the time, and still today, a state-of-the-art aluminium die casting and machining cell. The core of the die casting cell is the fully automated Buhler Carat 140L compact two-platen hydraulic locking die casting system. When you consider this, you wonder how it has ended up like this?