Owing to the economic and social consequences directly associated with the Covid-19 pandemic, and South Africa’s national lockdown, construction company Group Five may face delays in the completion of its business rescue proceedings.
In a statement on April 1, the business rescue practitioners (BRPs) – Dave Lake and Peter van den Steen – noted that this would include the realisation of multiple processes and objectives within the process for the embattled company, and its subsidiary, Group Five Construction.
The period following the approval of the business rescue plan until about the end of the first quarter of 2020, was defined as “implementation Phase 1”; however, the determination of the date on which this phase is completed remains at the discretion of the BRPs.
Since then, in early March, the BRPs indicated that they were “ready and planning” for the proposed first distribution to concurrent credits, as had been forecast in the plan.
However, the Covid-19 crisis has changed the economic environment materially and the BRPs have now decided to instead preserve cash resources wherever possible.
The crisis was impacting on many aspects of the company’s businesses, as well as on the management and implementation of the business rescue process, the BRPs lamented.
However, they indicated that they were confident that they were “well positioned” to manage any threats to the implementation of the plan, other than likely delays in respect of asset realisations.
The BRPs noted that they were adopting a “prudent approach” in the interest of stakeholders.
What will happen with regard to the business rescue process after the lockdown period has concluded, is subject to the evaluation of the company’s cash position, they added.
This is envisaged to take place during the second quarter of this year.