The Antwerp commercial court has instructed Nyrstar to postpone a general meeting scheduled for June 30 to make a decision on the dissolution of the zinc firm.
The move comes after demand from a group of Belgian minority shareholders united around RSQ Investors, arguing lack of transparency on the restructuring of Nyrstar.
Geneva-based Trafigura acquired 98% of Nyrstar in early 2019 as part of a restructuring process.
RSQ Investors accuses Nyrstar of having, in close consultation with Trafigura, significantly harmed the company since Trafigura’s entry into the company in 2015 by “tacitly contributing to the impoverishment of the company through a series of on- and off-take agreements.”
Deloitte, which acted as the auditor for Nyrstar, had previously warned that incomplete disclosures relating to supply deals with Trafigura could affect Nyrstar’s financial reports.
“It is our conviction that the board of directors could and should have created all the necessary financial transparency before, and thus would have avoided the statutory auditor Deloitte delivering a qualified opinion on the annual accounts for two consecutive years,” RSQ Investors said in a press release.
“As a result, the minority shareholders are deprived of important information regarding the contested restructuring and the circumstances that gave rise to it.”
The zinc producer’s financial troubles began around 2010, when management embarked on a debt-fuelled spree of mining acquisitions. Prices for the metal dropped by 26% in 2018, leaving the company in no position to make a bond repayment.
Nyrstar said at the time that asset write-downs, “severe deterioration” in the global economy and lower zinc treatment charges were among the reasons for its collapse.
Currently, the firm is the world’s second largest zinc producer and one of the biggest zinc smelting companies. It has operations across northern Europe, the United States and Australia. Its mines are located in North America.
Trafigura and Nyrstar have not responded to requests for comment on the decision.