The business rescue practitioners (BRPs) of embattled JSE-listed construction company Basil Read on Thursday announced they had appointed an independent sales adviser to value the company’s mining business and adjudicate on potential offers for the business.
This business is one of two the company has, so far, retained during its business rescue proceedings and which continues to be self-sustaining.
Meanwhile, Basil Read on Thursday confirmed that it had ceased, terminated or completed 25 of 27 lossmaking contracts since it started implementing business rescue proceedings in October.
Additionally, the company and its BRPs had managed to reduce its aggregate contingent liability to R575-million, down from the R1.1-billion announced in June last year when it entered business rescue.
Further, from seven contracts that had been cancelled, performance guarantees had been called in on three instances and the company continues negotiations to mitigate losses arising from the call of guarantees.
Basil Read has also moved to a new head office, which significantly reduced its operational costs, while it has also reduced its overhead costs through accelerating retrenchments.
“The above status demonstrated significant progress in meeting a key objective of the business rescue plan, which was to facilitate the completion of lossmaking construction contracts and to minimise the risk of the performance guarantees being called.
“The other objective of the business rescue plan was to maximise the value of construction claims. In this regard, the BRPs had reported that the process was time-consuming and costly. However, they noted some positive victories, particularly with the Trans-Caledon Tunnel Authority and Transnet contracts,” the company stated.
In these two instances, the Dispute Adjudication Board had ruled in favour of Basil Read for a significant number of claims and the reversal of negative certificates.
The company continued to pursue the other outstanding claims which were substantial. The success in the recovery of these claims would impact materially on the end result of the business rescue process, it warned.
The BRPs maintain that full implementation of the business rescue plan will achieve better results than liquidation for the company.