Holding company Group Five Limited and subsidiary Group Five Construction have been placed in business rescue - other subsidiaries, including Developments and Investments and Operations and Maintenance, the manufacturing businesses and international subsidiaries, continue to operate as going concerns.
The group, with more than 7000 employees, had estimated at the time that it went into business rescue last week that it would need R230million to pay for retrenchments. But a spokesperson said yesterday that they did not know how many people would be retrenched at this stage.
Decisions were being taken about which contracts to terminate, which contracts to finish, while talks with potential lenders might also impact the number of people to be retrenched, she said.
The group has been bleeding staff for some time, in line with its deteriorating financial position. By the end of last October Group Five had shed some 1000 jobs over a year, including 600 permanent positions.
An Exxaro announcement on Friday that it had terminated an agreement with Group Five Projects for the construction of a new small coal plant at its Grootegeluk mine means that roughly 750 contract workers would be impacted by the decision.
The business practitioners said in an update yesterday that they would be identifying “the optimal way forward for all the companies and investments in the group”.
“This is a huge undertaking. Subject to this assessment, teams, clients, joint venture partners, subcontractors and suppliers will be informed of the status of each project and the way forward as a matter of urgency.”
Sales processes for some businesses in the Investments and Concessions and Manufacturing clusters were under way. Talks were also under way with lenders to obtain new funding for "operational and employee stability”.
Group Five Construction reflected an operating loss before tax of about R1.23bn for the year ended June 2018.