JOHANNESBURG - Esor Construction, a major subsidiary of listed engineering and construction group Esor, has become the latest prominent construction-related company to file for business rescue.
Esor yesterday admitted that it was financially distressed and listed a number of reasons for Esor Construction to be put under business rescue, including significant losses incurred on certain contracts in current and prior financial years and an estimated about R30 million currently owed to creditors.
It also blamed the challenging economic environment being experienced in the construction sector and the inability of Esor Construction to obtain short- and medium-term funding as reasons for the distress.
Esor Construction was one of a number of major construction companies that entered into debt-freezing arrangements, including Basil Read, Group Five and the Liviero Group.
The financial difficulties have largely been attributed to a dearth of construction work, particularly large government contracts, and underspending by government entities.