At the end of February, Group Five’s liabilities exceeded its assets by R1.3bn.
Group Five shareholders are unlikely to get anything out of the contractor’s business rescue process, the group, once a titan of SA’s construction sector, said in a presentation posted on its website on Thursday.
In March, Group Five announced it had gone into business rescue — a process aimed at rehabilitating financially distressed companies — because it could not get additional funding from lenders.
The company’s losses have been steadily growing. It said on Thursday it made a total loss of R1.8bn in the eight months to end-February. In the year to end-June 2018, it made a loss of R1.3bn; in 2017, its losses amounted to about R800m.
“The practitioners are of the opinion that there is a reasonable prospect of achieving a successful business rescue and to provide value to creditors,” they said in Thursday’s presentation.
“However, given that it is highly unlikely that all creditors will be made whole, it is expected that no value will flow to shareholders through the business rescue process.”
At the end of February, Group Five’s liabilities exceeded its assets by R1.3bn, the presentation shows.
The practitioners said a rights offer “is not feasible nor expected to create value to shareholders at this stage”.
The practitioners said that about four-fifths of the business rescue process and asset sales will be completed within a year, though the full process will take “significantly longer” because of litigations and other matters. Business Day