South Africa’s Group Five to save up to 3,500 jobs in restructuring programme

SOUTH AFRICA – Group Five limited, a South African construction firm expects to save between 3,000 and 3500 jobs through the sale of its assets to other entities as part of the new restructuring programme.

According to Business Live, the company’s Rescue practitioners, Peter van den Steen and Dave Lake, announced that it will present to its creditors a solid plan which was published before the end of august for approval on September 11.

 The business rescue plan outlined three distinct trading periods: The period from the start of the business rescue proceedings to the date of approval of the plan; an implementation phase until March 2020 and a further phase until the termination of the business rescue proceedings.

 “Notwithstanding that Group Five Construction is an extremely complex and wide-ranging business under severe financial distress, we remain confident that a successful business rescue will balance the rights and interests of all relevant stakeholders,” they said.

“The losses incurred by creditors will be materially less, at approximately $329 million, under the proposed rescue plans relative to the alternative scenario of a liquidation of the company.

“Through the restructuring and sale of businesses we anticipate that between 3,000 to 3,500 jobs will be saved, albeit under new ownership.”

The practitioners say they have secured funding from lender banks to provide operational solvency during the business rescue proceedings and to ensure that asset sale value realisations are optimised and losses from projects minimised.

“Wherever possible, subsidiaries and operating divisions of Group Five Construction have been or are being restructured and disposed to new ownership, for fair value, on a solvent basis and as going concerns.

“Where this is not possible, a controlled wind-down of the relevant subsidiaries and companies, as well as the head office of the company, will be implemented.”

 They said there would be no fire sales and that as opposed to liquidation, one of the main elements is that there is expected to be $329 million more available to creditor’s through this business rescue process.

Although certain of these sales processes include complex sales of international assets, and/or regulatory procedures and approvals that are outside of their control, they anticipated completing most sales by the end of March 2020.

According to Group Five Ltd the company had total liabilities in excess of $395 million. Its assets comprise shares in Everite and Group Five Construction.

A controlled disposal process is responsible for disposing all other assets that is financial or otherwise.

The practitioners said that the Group Five Ltd will not realise any recovery from the business rescue proceedings of the company and that there will be no return for its shareholders.

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