Esor is one of a number of listed construction companies experiencing financial and liquidity problems.
Wessel van Zyl, the chief executive of Esor, said on Friday that the group had made provision in its cash-flow forecast for retrenchment costs of about R10m, with the reduced headcount cutting costs by about R4m a month, and R13.6m in retrenchment costs incurred in the year. Esor retrenched 439 employees in the six months to August last year. It employed an average of 2533 people in its 2017 financial year.
Esor’s auditors determined, after receiving a report on the group’s liquidity position, that there appeared to be reasonable grounds that the company was financially distressed and a “reportable irregularity” was taking place.
However, Van Zyl said the Esor board's view was that the company was not and would not become financially distressed. He said this was informed by proactive steps that had been taken or matters concluded to avoid becoming financially distressed and ensure its creditors remained satisfied.