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Group Five [JSE:GRF] entered a form of bankruptcy protection known as business rescue and had its stock suspended from trading on the JSE as the construction company sees a “slim chance” for any value realisation for shareholders.
The company appointed David Lake and Peter van den Steen of Metis Corporate Advisory as business rescue practitioners for each of Group Five and G5 Construction, it said in a statement Tuesday.
The stock was suspended at 89 cents per share. G5 Construction is cutting jobs, but there will be a “significant” amount of severance pay due.
Other South African construction companies to have been forced into business rescue in the past year include Basil Read Holdings, a unit of Esor Ltd. and the Liviero Group. With the South African economy and state spending on infrastructure having slowed, construction firms are battling to fund long-term projects.
