The North Gauteng High Court on Wednesday placed embattled structural steel fabricators and erectors Cosira under provisional liquidation.

This comes one month after the First Group subsidiary applied for business rescue.

First Tech, which bought Cosira six months ago, stated in a June 12 business rescue application that its newly acquired subsidiary was “financially distressed” and, owing to a depressed economic climate, it was not making the level of profits required to maintain the company’s high overhead structure.

The financial losses were further compounded by the slowdown in the construction industry, losses suffered owing to labour unrest and logistical and quality challenges at some of its key contracts.

A spokesperson for First Tech said that the group was unable to immediately respond, owing to discussions currently under way, and that a statement would be sent out before the end of the week.

According to First Tech’s website, the 20-year-old firm currently had 18 business units and over 5 000 employees, excluding Cosira’s 2 000-strong workforce.

Attempts to reach First Tech’s attorney and business rescue practitioner were unsuccessful.

Cosira was currently involved in several significant projects – the most notable being its joint venture (JV) with French multinational Alstom on Eskom’s Kusile power station project.

The group teamed up with Alstom to deliver South Africa’s first wet flue gas desulphurisation technology at Eskom’s 4 800 MW Kusile project.

The consortium would engineer, supply and install a wet flue gas desulphurisation plant at each of the six 800 MW coal-fired boilers at the Kusile station. Cosira was tasked with the supply, fabrication, delivery and construction of all steel components, as well as the full installation of the general mechanical equipment.
Cosira was also expected to assist Alstom with commissioning during the final stages of project execution.

The Cosira Tubular JV, through Alstom, was also constructing a steam turbine hall for the power station. The turbine hall was expected to be completed by July 2016.
Alstom, in an emailed statement, commented that existing teams were on site “with serious activity” to ensure agreed milestones for the projects were met.

“Alstom reiterates its commitment to the timely completion of all ongoing projects, both at Medupi and Kusile, within the agreed time frames,” the company said.
Cosira was also working on other projects at Kusile, including two new stockyard and terrace contracts.

John da Silva senior started Cosira in 1988 as a “small, entrepreneurial, family-owned business” in Heriotdale, Johannesburg. First Tech bought Cosira when it was under the leadership of then CEO John da Silva junior in December and appointed Leon Kapp to head up and integrate the newly acquired subsidiary into the group.