Basil Read's rescue plan was published yesterday and confirmed that a total of R238 million in post-business rescue commencement term loan facilities had been secured from funders. Photo: Supplied
JOHANNESBURG – Financially distressed listed construction group Basil Read, which is in business rescue, has agreed to sell the 28 percent interest in the Majwe Mining joint venture owned by its wholly owned subsidiary Basil Read Mining Botswana for R110.5million.

It has agreed to sell the shareholding to Thiess Botswana and Bothakga Burrow Botswana (BBB), its joint venture partners in Majwe Mining.

The total unadjusted net profit after tax of the Majwe joint venture for the 12 months to December was about R130m, with Basil Read Mining Botswana’s 28 percent share worth about R36.4m.

The transaction, once finalised, would be the first of several non-core-asset disposals envisaged in Basil Read’s business rescue plan.

It said the proceeds of the transaction were expected to be used as working capital for the mining business, with excess funds provided to the group as post-business rescue commencement funding to assist the business rescue process.

Basil Read’s business rescue plan was approved by shareholders in September.

The prime objectives of the plan included facilitating the completion where possible of construction projects in progress; realising maximum value from a number of assets, including contract claims, assets identified for sale, immovable property, surplus construction plant and equipment, and non-core investments; achieving and paying a business rescue dividend that was better than a dividend arising from the immediate liquidation of the company; restricting jobs losses; and mitigating the risks of guarantors.

Basil Read Mining Botswana entered into the joint venture in 2011 with Leighton Botswana, which subsequently changed its name to Thiess, to bid for and, if successful, carry out the surface mining works project at Jwaneng Mine for Debswana Diamond Company.

Leighton holds 60percent of the shares in the joint venture company, Basil Read Mining Botswana 28percent and BBB 12percent.

The joint venture was awarded the contract in May 2011, which was for a 66-month period to November 2016 but extended to November 23 last year.

Explaining the rationale for the disposal, Basil Read said on Friday Debswana Diamond Company in 2017 issued an expression of interest for the next stage of the mining works project for the Jwaneng Mine development.