Group Five’s joint business rescue practitioners
reported on Thursday that they would be approaching creditors to seek approval
for yet another extension to the June 28 deadline for the publication of a
business rescue plan.
Initially a deadline of April 16 was set in line
with a legal requirement that the rescue plan be published within 25 days from
the date of the practitioners being appointed. Dave Lake and Peter
van den Steen, who were appointed on March 13 after Group Five was
placed into business rescue on March 11, then secured support for an extension
to the end of June.
However, in a status update communicated to
shareholders through the Stock Exchange News Service on June 13, Lake and Van
den Steen said the original extension date had proven to be optimistic, owing
to the “complexity of the matter and the need for us to consult more widely”.
“We will therefore be approaching creditors to seek
their approval for an extension of the date for publication in due course.”
The rescue of Group Five Limited was dependent on
the successful rescue of Group Five Construction, which Lake and Van den Steen
said was advancing.
Disposal processes for ten Group Five Construction
assets had been initiated, along with moves to sell Everite’s manufacturing
assets. A further three businesses were being
restructured in preparation for disposal.
In addition, 180 pieces of equipment, which were no
longer being used operationally, had been sold for about R115-million.
Lake and Van den Steen expressed optimism that 60
out of 79 projects under construction at the time of Group Five entering
business rescue would be completed. However, 11 projects had been terminated
and there was a risk that one other project might not be rejuvenated, despite
funding having been made available to do so.
Retrenchment consultations initiated by Group Five
Construction in December 2018, ahead of rescue proceedings, had been finalised,
but the exit of employees from the company’s operations had not yet been
finalised.
A second retrenchment process, initiated in April
after the company entered into business rescue, was being facilitated by the
Commission for Conciliation, Mediation and Arbitration and was expected to be
finalised by the end of June 2019.
The rescue practitioner did not release details on
the number of employees affect, saying only that is had considered the most
beneficial way to structure the timing of further retrenchments, and the
payment of the severance entitlements, to ensure that affected employees are
treated as favourably as possible.
Employees have also been invited to apply for
voluntary retrenchment packages.
“For the business rescue efforts to be successful,
and in an attempt to avoid an immediate liquidation, it is necessary for the
company to reduce its overhead costs and short term cash outflows
significantly,” the practitioners said in a statement.
Group Five’s business rescue practitioners will update shareholders on the processes under way to rescue the company at a meeting to be held in Johannesburg on June 20. https://www.engineeringnews.co.za/article/rescue-practitioners-seek-another-extension-for-group-five-plan-2019-06-13
