Chemical Specialities (Chemspec) has commenced with voluntary business rescue proceedings, stating that it is ‘financially constrained’.
This follows the recent resignation of non-executive director and chairman, Ivan Clark, who was at the company for four and a half years.
The paint company had earlier entered into negotiations with its major shareholders to raise additional capital, however, this proved unsuccessful and the expected financial support was declined.
“The board of directors of [DATA CSP:Chemspec] have concluded that Chemspec is now financially constrained,” it said.
“There appears however, to be a reasonable prospect of rescuing the company and a decision has therefore been taken to commence with voluntary business rescue proceedings for the company.”
The company added that a board resolution to this effect has been filed with the Companies and Intellectual Property Commission.
“The board of Chemspec is of the opinion that the implementation of business rescue will afford the company the opportunity to develop and implement a business rescue plan in a manner that will optimise the likelihood of Chemspec continuing to exist as a going concern,” it stated.
“The company is in discussions with prospective funders with regards to post commencement financing.”
Chemspec also requested that the JSE suspend trading in the ordinary and preference shares, share codes CSP and CSPP with immediate effect and the exchange agreed to this.