Companies / 30 September 2015, 07:30am / Roy Cokayne
Johannesburg - Listed construction group Basil Read has sold its energy business to Tewa Power, previously known as Afri-Coast Engineers SA, and African Pioneer Energy (APE), for R70 million.
The disposal follows Basil Read reporting in August last year that it had developed an 18-month turnaround strategy that involved the critical evaluation of the groups various businesses and assets into core and non-core categories. Basil Read Energy was deemed to be non-core and was earmarked for disposal.
Basil Read Energy was previously part of Basil Read’s wholly-owned mining consultancy business TWP Group, which was sold in 2012 to Australian Stock Exchange-listed WorleyParsons for R900m.
Basil Read said yesterday that the net proceeds from the disposal of Basil Read Energy would be applied towards the reduction of debt and capital management initiatives.
The net asset value of Basil Read Energy was R42.6m in the group’s most recent published unaudited results for the six months to June.
Basil Read Energy owns operating and developmental assets in the renewable energy sector and is the beneficial owner in a number of projects.
They include 25 percent of 3 Energy Renewables, a facilities management company providing management, technology diagnostic and technical services to renewable energy power plants; 23 percent of Rubicept, the 27 megawatt Van Stadens wind farm in the Eastern Cape; 75 percent of Rooikat Hydropower; and 52 percent of Meerkat Hydropower.
The losses attributable to these net assets in the six months to June totalled R2.1m.
Under the deal, the purchasers acquired the entire issued share capital of Basil Read Energy for R1 000 and all the claims Basil Read had against the company for R69.99m.
APE acquired 75 percent of the sale shares and claims and Teaw Power the balance.
The purchase price was paid in cash on Friday.
However, APE has irrevocably and unconditionally agreed to grant Spilled Water Renewable Energy a 40 business day option to acquire 50 percent of both the sale shares and claims in Basil Read Energy for R35m in cash.
Basil Read yesterday advised shareholders that discussions for the potential disposal of wholly-owned Spraypave were ongoing and, if successfully concluded, might have a material effect on the price of the company’s shares.
Basil Read’s strategy to dispose of non-core assets resulted in the group in February entering into an agreement to sell LYT Architecture to a management consortium for R42m and in May deciding on an “orderly shutdown” of its engineering, procurement and construction business, Basil Read Matomo.
An urgent application earlier this month for the liquidation of Basil Read lodged by sub-contractor Baarata Construction & Projects was applied for earlier this month to the North Gauteng High Court for the liquidation of Basil Read, claiming it was owed R4.2m by the group for work that had been completed at the Medupi power station project.
Judge Nomonde Mngqibisa-Thusi ruled that a case for urgency had not been made and dismissed the application with costs.
Basil Read shares rose 3.8 percent yesterday to close at R4.10 on the JSE.