JOHANNESBURG - Group Five, the construction group in business rescue, said yesterday in its first update to shareholders that business rescue proceedings were progressing well.
Post commencement finance (PCF) arrangements had been entered into with a consortium of bank lenders, and an initial draw-down to finance working capital requirements had been secured.
Discussions for further draw-downs were under way. In the construction business, the majority of projects would continue to completion as a result of being funded internally, being funded through PCF arrangements, or by being ceded. Certain non-performing projects had been exited, and “unfortunately some projects have been unilaterally cancelled by clients”, a statement said.
A retrenchment process was under way to reduce head count and the cash burn associated with the high - relative to the underlying businesses - head office costs. Agreements had been reached to sell 40.1percent in Intertoll Capital Partners, a 50percent stake in Barnes Reinforcing Industries and a 28.9percent shareholding in Jozi Power.
Agreements for the sale of plant and assets not being utilised and property not being utilised had also been reached. These were expected to realise R709million, which would be used to reduce the relevant secured debt and to settle working capital requirements. A reconstituted sale process was under way for the manufacturing cluster and for the Intertoll Europe business.
The business rescue partners were on track to publish a business rescue plan on or about June 28.