It has been announced that Steel Best Manufacturing Services, a 100% owned subsidiary of the Steel Best Group, has acquired all the assets of the recently liquidated Steel Best Automotive Pty Ltd, a company that was appointed in May 2016 to facilitate the rehabilitation of the Springs-based aluminium foundry operations of Zealous Automotive and Zealous Pressure Castings, which at the time was in business rescue.
“The Zealous companies had become financially distressed and 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,” said a company spokesperson.
“Initially one of the main clients that the company had a contract with – Volkswagen South Africa – was presented with our turnaround plan and they accepted what we proposed and, at the time, we began producing over 450 cam carriers a day for them. The cam carriers are for the local EA 111 four-cylinder 1.4-litre Polo engine and each weigh 2.4 kilograms.”
“Additionally, we were also contracted to produce another component for Volkswagen South Africa, also for the 1.4-litre Polo.”
“They showed confidence in us, as did one of the major shareholders, the IDC. They had a 49% stake in the business.”
“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.
No figure has been given as to what the Steel Best Group paid for the liquidated assets. However, included in the negotiations was that the new company – Steel Best Manufacturing Services – would continue with the VWSA contracts. These contracts have now been transferred to the new company, which has no historical debt and a strong balance sheet, as a result of achieving a successful turnaround of the previously distressed companies. This further resulted in onboarding new clients and retaining key skills and jobs in the automotive industry.