Photo by: Creamer Media
Group Five’s joint business rescue practitioners reported on Thursday that they would be approaching creditors to seek approval for yet another extension to the June 28 deadline for the publication of a business rescue plan.
Initially a deadline of April 16 was set in line with a legal requirement that the rescue plan be published within 25 days from the date of the practitioners being appointed. Dave Lake and Peter van den Steen, who were appointed on March 13 after Group Five was placed into business rescue on March 11, then secured support for an extension to the end of June.
However, in a status update communicated to shareholders through the Stock Exchange News Service on June 13, Lake and Van den Steen said the original extension date had proven to be optimistic, owing to the “complexity of the matter and the need for us to consult more widely”.
“We will therefore be approaching creditors to seek their approval for an extension of the date for publication in due course.”
The rescue of Group Five Limited was dependent on the successful rescue of Group Five Construction, which Lake and Van den Steen said was advancing.
Disposal processes for ten Group Five Construction assets had been initiated, along with moves to sell Everite’s manufacturing assets. A further three businesses were being restructured in preparation for disposal.
In addition, 180 pieces of equipment, which were no longer being used operationally, had been sold for about R115-million.
Lake and Van den Steen expressed optimism that 60 out of 79 projects under construction at the time of Group Five entering business rescue would be completed. However, 11 projects had been terminated and there was a risk that one other project might not be rejuvenated, despite funding having been made available to do so.
Retrenchment consultations initiated by Group Five Construction in December 2018, ahead of rescue proceedings, had been finalised, but the exit of employees from the company's operations had not yet been finalised.
A second retrenchment process, initiated in April after the company entered into business rescue, was being facilitated by the Commission for Conciliation, Mediation and Arbitration and was expected to be finalised by the end of June 2019.
The rescue practitioner did not release details on the number of employees affect, saying only that is had considered the most beneficial way to structure the timing of further retrenchments, and the payment of the severance entitlements, to ensure that affected employees are treated as favourably as possible.
Employees have also been invited to apply for voluntary retrenchment packages.
“For the business rescue efforts to be successful, and in an attempt to avoid an immediate liquidation, it is necessary for the company to reduce its overhead costs and short term cash outflows significantly,” the practitioners said in a statement.
Group Five’s business rescue practitioners will update shareholders on the processes under way to rescue the company at a meeting to be held in Johannesburg on June 20.