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Afarak insists plans to scale back Mogale output won't affect buy-back or financing

Afarak said it expects the temporary shut-down to keep losses from Mogale operations “contained”.

Afarak
Afarak will shut down some of its production at the Mogale plant

Afarak Group PLC (LON:AFRK) has reassured investors that its decision to scale back production at its Mogale operations in South Africa would not affect its planned share buy-back or financing.

On Wednesday the chrome producer said it would shut down some of its production at the Mogale plant after coming under pressure from falling ferrochrome prices and rising energy costs in South Africa.

READ: Afarak to scale back production at Mogale operations amid challenging headwinds

The group has decided to halt the use of two submerged arc furnaces at its Mogale smelter.

In a Thursday statement, Afarak said it expects the temporary shut-down to keep losses from Mogale operations “contained”.

“However, due to several variables affecting the financial outcome of this shut-down, it is impossible to quantify the effect,” it said.

“The results will be seen during second half of the year 2019.”

Afarak insisted that the changes in the production “do not affect the buy-back or its financing”

In late 2018, Afarak announced that it would offer shareholders €1.015 per share to buy back its stock after investors voted in favour of the proposal at an extraordinary general meeting.

Quick facts: Afarak Group PLC

Price: 52.5 GBX

LSE:AFRK
Market: LSE
Market Cap: £137.11 m
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Afarak Group PLC (LON:AFRK) CEO Guy Konsbruck updates Proactive London on operations after what's proven to be a challenging start to the year for the firm. This month the chrome producer said it would shut down some of its production at the Mogale plant after coming under pressure from...

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