Recylex shares suspended as value soars 40% in two days
Trading in the shares of European zinc and lead producer Recylex was suspended on Monday July 8 at the company’s own request, following an “unexplained rally” during the previous two days.
The price of the lead and zinc recycler’s shares on Euronext Paris had ramped up by more than 40%, rising between July 5 and July 8 to €5.2 ($5.8) per share from €3.7 per share.
In January, the company’s German subsidiary, Weser-Metall GmbH, which operates the group’s lead smelter in Nordenham, carried out an expected maintenance shutdown due to advanced wear of the furnace. This had resulted from a change of operating mode since its connection to a new reduction furnace and consequent technical difficulties.
In the first quarter of 2019, the lead and zinc recycler reported sales revenue of €75.8 million ($85.05 million), a fall of 20% year-on-year due to major maintenance shutdowns and falling prices for both metals.
Additionally, in May, the smelter was granted a reprieve from debtors regarding repayments of loans taken out by Weser-Metall when repairs and replacements for the lead smelter created the need for additional cash.
But it was told that it must pay a fine of €26.7 million, initially imposed in 2017, for its role in colluding with other European lead recyclers to keep the price they paid for scrap batteries artificially low.
In a message to shareholders on June 27, Sebastian Rudow, chairman and chief executive officer of Recylex SA, said: “We have been recently confronted with a market situation that has deteriorated considerably, but above all the production levels of our German sub-group remain unsatisfactory.”
The terms and conditions necessary for a resumed listing of Recylex shares will be specified in the company’s next press release.