JSE-listed construction and engineering group Stefanutti Stocks has announced that a restructuring plan for the company has been completed and approved by its board, including having regard to the potential impact of Covid-19.
The company appointed a strategic restructuring team in November to assist with the implementation of turnaround interventions after it started reporting liquidity pressures and losses, partly owing to lower order books, earlier in the year.
The restructuring plan includes the disposal of noncore assets, the disposal of certain divisions or subsidiaries, internal restructuring initiatives to restore optimal operational and financial performance, and securing additional short-term funding of R430-million – of which R270-million relates to Covid-19 impacts.
Additionally, the company will consider raising new equity, depending on how evaluation of an optimum business model and associatee capital structure analysis goes in the coming months.
“The plan should put in place optimal capital structure and access to liquidity to position the group for long-term growth in this dynamic environment,” Stefanutti states.
The company’s lenders have agreed to provide additional short-term funding to the group and to restructuring some of the short-term funding into longer-term funding, subject to certain financing conditions being met, including the conclusion of a long-term funding agreement.
Stefanutti will implement the restructuring plan over the financial years ending February 2021, February 2022 and, to the extent required, shareholder approval will be sought for relevant aspects of the plan.
Meanwhile, work has resumed at about 60% of the company’s projects in South Africa, while the projects based in Botswana, eSwatini, Zambia and the United Arab Emirates are all operational.
In Mozambique, one project remains closed.
The company anticipates that work on the remaining South African operations will resume during Level 3 of the country’s lockdown, starting June 1.
Although the company has made provision for Covid-19 impacts, it cannot yet determine the full impact.
Stefanutti does, however, expect to report a loss in earnings for the year ended February 29, with a loss a share of between 610c and 650c expected.
The company reported a loss a share of 65.99c for the year ended February 28, 2019.