Johannesburg - BSI Steel [JSE:BSS] advised shareholders on Friday that in terms of Section 45 of the Companies Act it is providing assistance to its subsidiaries.
In terms of the special resolution tabled and approved at the annual general meeting held on September 14 last year‚ authorising directors in terms of Section 45 of the act to provide direct or indirect financial assistance to any company or corporation which is related or inter-related to the company.
BSI Steel has a number of subsidiary companies namely BSI Steel Africa (sub-subsidiaries BSI Steel Ghana‚ BSI Steel Mozambique‚ BSI Steel Zambia and BSI Steel Katanga SPRL)‚ BSI Specialized Steels‚ Newcolab‚ Red Chip Investments‚ Shearcut‚ Brown McFarlane Africa and West Dunes Properties 296.
The funding of the BSI Steel group is done on a group basis and the subsidiaries contribute to the group securities which include cross-company guarantees from the holding company in favour of the subsidiaries and vice versa.
Group expenses‚ sundry purchases‚ steel purchases‚ working capital and fixed capital funding is controlled via inter-company loan accounts. All transactions are at arms-length‚ at market-related prices and are done in the ordinary course of business.
In terms of the Section 45(2)‚ the board has adopted a resolution authorising the continued group expenses‚ sundry purchases‚ steel purchases‚ working capital‚ fixed capital funding transactions and guarantees given between the companies in the ordinary course of business until March 31 2014 up to a value of R50m per subsidiary excluding BSI Steel Africa Limited‚ which will receive up to R135m in assistance.