Group Five gets ready to de-list from the JSE
The company, which had been struggling for years due to the weak economy and declining government infrastructure investment, finally threw in the towel yesterday after going into business rescue last September. Group Five suspended the trading of its shares in March last year. Other large listed construction groups to go into liquidation or business rescue for the same reasons include Basil Read and Esor.
Group Five listed on the JSE in 1974 and helped to build the King Shaka airport, the Moses Mabhida Stadium, the Durban/Johannesburg fuel pipeline, large sections of the N1, N2 and N4 highways, the head offices of Nedbank and Cell C, and many other landmark civil engineering and construction projects in the country.
Business rescue practitioners Dave Lake and Peter van Steen said yesterday that there was very little chance of “any realistic prospect of there being any residual value available for or attributable to shareholders and, consequently, the issued shares of the company have no value”.
In addition, Group Five no longer complied with the JSE’s listings requirements in various respects, such as not having a board, board committees, prescribed capital or recent audited financial statements.
Although worthless now, the shares were suspended at 89cents per share last year. Five years ago, the share price was trading as high as R31 per share.
Over the past three months, other well-known companies, such as Edcon, Comair and SAA, have filed for business rescue due to the weak economy, compounded recently by the effects of the national lockdown.
In April, Lake and Van Steen said in a report that the business rescue proceedings could be delayed due to the economic and social consequences of the coronavirus pandemic lockdown in South Africa.
They said sale process for the subsidiary Everite business had been temporarily suspended with a planned relaunch at a more appropriate time.
Lake and Van Steen said that the payment of the first distribution to concurrent creditors, would only happen after the lockdown period and would be subject to the evaluation of the company’s cash position. Currently, this was envisaged to take place during the second quarter of 2020.
Remaining project-related construction activities were being exited, ceded, concluded by the company in controlled, stable processes, specific to each individual project.
Most construction sites, other than those identified to be related to critical services, had been locked down, with construction activities expected to resume when the lockdown ends.
South Africa’s construction industry has a long history of boom and bust in that there were periods of strong construction activity in the early 1970s, early 1990s, and the mid-2000s that were followed by downturns, and eventual recoveries.