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Group Five insists business rescue plan on track

Jun 20 2019 20:41
Sibongile Khumalo

Group Five is seeking an extension for the publication date of its business rescue plan, as it insists that the process "remains on track". 

In a statement issued on Thursday, the struggling construction firm said it wanted majority consent from creditors to extend the publication date of the business rescue plan to August 30, 2019.

The company announced in March that it had entered bankruptcy protection and suspended its stock on the JSE. The company at the time said that it saw a "slim chance" for any value realisation for shareholders.

Complex proceedings

"Due to the complexity of the business rescue proceedings, the BRPs are seeking the consent of a majority of the creditors to extend the publication date of the business rescue plan to 30 August 2019," said a statement.

The Johannesburg-based firm had previously requested an extension of the deadline for the submission to June.

The statement further stated that business rescue practitioners "have in the meantime secured further post commencement finance funding from the lender consortium and the business rescue process remains on track."

The troubled firm also said it had entered into more binding agreements for the disposal of its operations. These include the African structural, mechanical, electrical instrumentation and piping (SMEIP) business; shares in subsidiary companies; the Northpoint property development; plus various properties that are not being utilised in the ordinary course of business. Additionally, there are plants and assets also not being utilised in the ordinary course of business.

These assets are expected to generate R1bn. 

Earlier, the company - once valued at as much as R8.2bn - said it was shedding its biggest subsidiaries, namely Intertoll Europe; Everite (which does building and roofing work) and G5 Properties.

The company is one of five local construction companies to enter business rescue this year, amid poor economic growth.

G5 Construction board said the company experienced negative cash flows of R880m in 2018, and would need R3.6bn to fund its working capital requirements up to December 2019. 

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