13 September 2019

Business rescue practitioners (BRPs) Dave Lake and Peter van den Steen on Wednesday
presented the business rescue plans for Group Five Construction (G5
Construction) and Group Five Limited (G5) to shareholders and received an
“overwhelming positive vote of confidence” from shareholders.

The business rescue processes for these entities
are two legally separate proceedings, with two separate business rescue plans.
G5 Construction represents the majority of the businesses, claims and recovery
value within the greater G5 group of companies.

G5 Construction, in particular, had 96.1% of
shareholders vote in favour of the business rescue plan, surpassing the
required threshold of 75%.

As outlined in the business plan, creditors would
be about R5-billion better off than they would be the case in a liquidation.
Through the restructuring and sale of businesses, the BRPs anticipate that
between 3 000 and 3 500 jobs will be saved under new ownership.

Independent chairperson of the committee of
creditors, Fasken’s Haroon Laher,
on Wednesday said he had “no doubt” that the current business rescue process
and business plan were the “best course of action” and he recommended to
creditors ahead of the vote that the published business rescue plan be adopted.

This is the first time in a business rescue process
in South Africa that an independent creditor committee chairperson was
appointed by a committee representing the creditors, which the BRPs believe was
in the best interest of creditors to provide them with an independent analysis.

This process was also supplemented by an
independent report by PwC outlining the scenario for creditors if the company
were to have been placed in liquidation and not business rescue.

On successful implementation of the business rescue
plan, secured creditors are, in aggregate, expected to receive distributions of
between 66c and 78c a share. Concurrent creditors are expected to receive
distributions of between 9c and 20c a share.

Meanwhile, for G5, 98% of eligible creditors voted,
with 100% having voted in favour of the business rescue plan. This also
surpassed the required threshold for implementation of the plan of 75%.

G5’s assets comprise shares in Everite and G5
Construction, with Everite being the only asset that will realise proceeds for

Everite is currently being disposed of in a
controlled sales process, and following a pledge and session made to funding
banks, and as a result of the group’s Kpone client calling of bonds of about
R1.5-billion in respect of this contract, the lender banks will be the only
recipient of the proceeds derived from the sale of Everite.

G5 will not realise any recovery from the business
rescue proceedings of its primary subsidiary, G5 Construction, according to the

As previously announced, it is not anticipated at
this time that there will be any return to the shareholders of G5.

However, the secured creditors of G5 are expected
to receive distributions of between 39c and 50c.

G5 will be wound up and delisted in time, the BRPs confirmed.

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